Edgar Filing: Vale S.A.

Form 6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of

February 2010

Vale S.A.

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-_____.)

Table of Contents


Press Release

Signature Page

Press Release

Filed at CVM and SEC on 02/10/10

Gerência Geral de Controladoria — GECOL

Vale S.A.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Nr.

Report of Independent Registered Public Accounting Firm		2

Management’s Report on Internal Control Over Financial Reporting		4

Consolidated Balance Sheets as of December 31, 2009 and 2008		5

Consolidated Statements of Income for the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and for the years ended December 31, 2009 and 2008		7

Consolidated Statements of Cash Flows for the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and for the years ended December 31, 2009 and 2008		8

Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and for the years ended December 31, 2009 and 2008		9

Consolidated Statements of Comprehensive Income (deficit) for the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and for the years ended December 31, 2009 and 2008		10

Notes to the Consolidated Financial Statements		11

Supplemental Financial Information (unaudited)		56


		PricewaterhouseCoopers
		Rua da Candelária, 65 — 11°. 14°. 15° e 1
		Cjs. 1302 a 1304
		2009 1-020 — Rio de Janeiro — RJ — Brasil
		Caixa Postal 949
		Telefone (21) 3232-6112
		Fax (21) 2516-6319
		pwc.com/br

Report of Independent Registered
Public Accounting Firm

To the Board of Directors and Stockholders
Vale S.A.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of comprehensive income, of cash flows and of changes in stockholders’ equity present fairly, in all material respects, the financial position of Vale S.A. (formerly Companhia Vale do Rio Doce) and its subsidiaries (“Company”) at December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on internal control over financial reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Vale S.A.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As discussed in Note 2(a) to the consolidated financial statements, the Company changed its method of accounting for minority interest (now termed non controlling interests) effective January 1, 2009 and, retrospectively, adjusted the financial statements as of December 31, 2008 and 2007 and for the years then ended.

PricewaterhouseCoopers
Auditores Independentes

Rio de Janeiro, Brazil
February 10, 2010

Management’s Report on Internal Control over Financial Reporting

The management of Vale S.A (Vale) is responsible for establishing and maintaining adequate internal control over financial reporting.

The company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, and that the degree of compliance with the policies or procedures may deteriorate.

Vale’s management has assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2009 based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission — COSO. Based on such assessment and criteria, Vale’s management has concluded that the company’s internal control over financial reporting was effective as of December 31, 2009.

The effectiveness of the company’s internal control over financial reporting as of December 31, 2009 has been audited by PricewaterhouseCoopers Auditores Independentes, an independent registered public accounting firm, as stated in their report which appears herein.

February 10, 2010

Roger Agnelli
Chief Executive Officer

Fábio de Oliveira Barbosa
Chief Financial Officer

Consolidated Balance Sheets
Expressed in millions of United States dollars


	As of December 31
	2009		2008

Assets
Current assets
Cash and cash equivalents		7,293		10,331
Short-term investments		3,747		2,308
Accounts receivable
Related parties		79		137
Unrelated parties		3,041		3,067
Loans and advances to related parties		107		53
Inventories		3,196		3,896
Deferred income tax		852		583
Unrealized gains on derivative instruments		105		—
Advances to suppliers		498		405
Recoverable taxes		1,511		1,993
Others		865		465

		21,294		23,238


Non-current assets
Property, plant and equipment, net		67,637		48,454
Intangible assets		1,173		875
Investments in affiliated companies, joint ventures and others		4,585		2,408
Other assets
Goodwill on acquisition of subsidiaries		2,313		1,898
Loans and advances
Related parties		36		—
Unrelated parties		158		77
Prepaid pension cost		1,335		622
Prepaid expenses		235		223
Judicial deposits		1,143		1,141
Advances to suppliers — energy		511		408
Recoverable taxes		817		394
Unrealized gains on derivative instruments		865		93
Others		177		161

		7,590		5,017

TOTAL		102,279		79,992

Consolidated Balance Sheets
Expressed in millions of United States dollars
(Except number of shares)


	(Continued)
	As of December 31
	2009			2008

Liabilities and stockholders’ equity
Current liabilities
Suppliers		2,309			2,261
Payroll and related charges		864			591
Current portion of long-term debt		2,933			633
Short-term debt		30			—
Loans from related parties		19			77
Provision for income taxes		173			502
Taxes payable and royalties		124			55
Employees postretirement benefits		144			102
Railway sub-concession agreement payable		285			400
Unrealized losses on derivative instruments		129			—
Provisions for asset retirement obligations		89			48
Minimum mandatory dividends payable		1,464			2,068
Other		618			500

		9,181			7,237


Non-current liabilities
Employees postretirement benefits		1,970			1,485
Long-term debt		19,898			17,535
Provisions for contingencies (Note 20 (b))		1,763			1,685
Unrealized losses on derivative instruments		9			634
Deferred income tax		5,755			4,005
Provisions for asset retirement obligations		1,027			839
Debentures		752			379
Other		1,427			1,146

		32,601			27,708


Redeemable noncontrolling interest (Note 4 (b))		731			599

Commitments and contingencies (Note 20)

Stockholders’ equity
Preferred class A stock — 7,200,000,000 no-par-value shares authorized and 2,108,579,618 (2008 — 2,108,579,618) issued		9,727			9,727
Common stock — 3,600,000,000 no-par-value shares authorized and 3,256,724,482 (2008 — 3,256,724,482) issued		15,262			15,262
Treasury stock —77,581,904 (2008 — 76,854,304) preferred and 74,997,899 (2008 — 74,937,899) common shares		(1,150	)		(1,141	)
Additional paid-in capital		411			393
Mandatorily convertible notes — common shares		1,578			1,288
Mandatorily convertible notes — preferred shares		1,225			581
Other cumulative comprehensive loss		(1,808	)		(11,510	)
Undistributed retained earnings		28,508			18,340
Unappropriated retained earnings		3,182			9,616

Total Company stockholders’ equity		56,935			42,556
Noncontrolling interests		2,831			1,892

Total stockholders’ equity		59,766			44,448

TOTAL		102,279			79,992

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Income
Expressed in millions of United States dollars
(Except per share amounts)


	Three-month period ended (unaudited)									Year ended of December, 31
	December			September			December
	31, 2009			30, 2009			31, 2008			2009			2008			2007

Operating revenues, net of discounts, returns and allowances

Sales of ores and metals		5,366			5,824			6,052			19,915			32,779			28,441

Aluminum products		611			529			779			2,050			3,042			2,722

Revenues from logistic services		307			317			310			1,104			1,607			1,525

Other products and services		257			223			301			870			1,081			427


		6,541			6,893			7,442			23,939			38,509			33,115

Taxes on revenues		(208	)		(187	)		(187	)		(628	)		(1,083	)		(873	)


Net operating revenues		6,333			6,706			7,255			23,311			37,426			32,242


Operating costs and expenses

Cost of ores and metals sold		(2,899	)		(2,663	)		(2,730	)		(10,026	)		(14,055	)		(13,628	)

Cost of aluminum products		(571	)		(535	)		(529	)		(2,087	)		(2,267	)		(1,705	)

Cost of logistic services		(235	)		(201	)		(190	)		(779	)		(930	)		(853	)

Other		(290	)		(192	)		(71	)		(729	)		(389	)		(277	)


		(3,995	)		(3,591	)		(3,520	)		(13,621	)		(17,641	)		(16,463	)

Selling, general and administrative expenses		(378	)		(289	)		(708	)		(1,130	)		(1,748	)		(1,245	)

Research and development expenses		(296	)		(231	)		(295	)		(981	)		(1,085	)		(733	)

Impairment of goodwill		—			—			(950	)		—			(950	)		—

Other		(561	)		(302	)		(719	)		(1,522	)		(1,254	)		(607	)


		(5,230	)		(4,413	)		(6,192	)		(17,254	)		(22,678	)		(19,048	)


Operating income		1,103			2,293			1,063			6,057			14,748			13,194

Non-operating income (expenses)

Financial income		65			98			247			381			602			295

Financial expenses		(548	)		(430	)		(399	)		(1,558	)		(1,765	)		(2,517	)

Gains (losses) on derivatives, net		296			341			(586	)		1,528			(812	)		931

Foreign exchange and indexation gains (losses), net		17			119			(241	)		675			364			2,553

Gain (loss) on sale of assets		(190	)		73			—			40			80			777


		(360	)		201			(979	)		1,066			(1,531	)		2,039


Income before income taxes and equity results		743			2,494			84			7,123			13,217			15,233


Income taxes

Current		583			(696	)		966			(2,084	)		(1,338	)		(3,901	)

Deferred		173			(230	)		219			(16	)		803			700


		756			(926	)		1,185			(2,100	)		(535	)		(3,201	)

Equity in results of affiliates, joint ventures and other investments		71			155			125			433			794			595


Net income		1,570			1,723			1,394			5,456			13,476			12,627


Net income attributable to noncontrolling interests		51			46			27			107			258			802


Net income attributable to the Company’s stockholders		1,519			1,677			1,367			5,349			13,218			11,825


Basic and diluted earmings per share attributable to Company’s stockholders

Earnings per preferred share		0.28			0.31			0.25			0.97			2.58			2.41

Earnings per common share		0.28			0.31			0.25			0.97			2.58			2.41

Earnings per prefered share linked to convertible mandatorily notes (*)		0.52			0.50			0.76			1.71			4.09			3.30

Earnings per common share linked to convertible mandatorily notes (*)		0.59			0.59			0.81			2.21			4.29			3.51


(*)		Basic earnings per share only, as dilution assumes conversion

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows
Expressed in millions of United States dollars


	Three-month period ended (unaudited)									Year ended of December, 31
	December			September			December
	31, 2009			30, 2009			31, 2008			2009			2008			2007

Cash flows from operating activities:

Net income		1,570			1,723			1,394			5,456			13,476			12,627
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization		799			721			568			2,722			2,807			2,186
Dividends received		243			—			116			386			513			394
Equity in results of affiliates, joint ventures and other investments		(71	)		(155	)		(125	)		(433	)		(794	)		(595	)
Deferred income taxes		(173	)		230			(219	)		16			(803	)		(700	)
Impairment of goodwill		—			—			950			—			950			—
Loss on disposal of property, plant and equipment		113			93			10			293			376			168
(Gain)/Loss on sale of investments		190			(73	)		—			(40	)		(80	)		(777	)
Foreign exchange and indexation losses (gains), net		(37	)		(184	)		740			(1,095	)		451			(2,827	)
Unrealized derivative losses (gains), net		(248	)		(329	)		649			(1,382	)		809			(917	)
Unrealized interest (income) expense, net		2			24			(3	)		(25	)		116			102
Others		(5	)		59			17			20			(3	)		115
Decrease (increase) in assets:
Accounts receivable		327			(373	)		1,615			616			(466	)		235
Inventories		(128	)		441			(43	)		530			(467	)		(343	)
Recoverable taxes		(791	)		(272	)		(144	)		108			(263	)		—
Others		(277	)		(93	)		(27	)		(455	)		21			(292	)
Increase (decrease) in liabilities:
Suppliers		559			(108	)		200			121			703			998
Payroll and related charges		108			128			(25	)		159			1			170
Income taxes		(696	)		522			119			(234	)		(140	)		393
Others		(74	)		140			501			373			(93	)		75

Net cash provided by operating activities		1,411			2,494			6,293			7,136			17,114			11,012

Cash flows from investing activities:
Short term investments		815			(1,562	)		(1,674	)		(1,439	)		(2,308	)		—
Loans and advances receivable
Related parties
Loan proceeds		(14	)		(106	)		(3	)		(181	)		(37	)		(33	)
Repayments		—			—			18			7			58			10
Others		(4	)		(11	)		24			(25	)		(15	)		1
Judicial deposits		(55	)		(24	)		(71	)		(132	)		(133	)		(125	)
Investments		(806	)		(712	)		(19	)		(1,947	)		(128	)		(324	)
Additions to, property, plant and equipment		(2,755	)		(1,645	)		(3,689	)		(8,096	)		(8,972	)		(6,651	)
Proceeds from disposal of investments/property, plant and equipment		158			171			—			606			134			1,042
Acquisition of subsidiaries, net of cash acquired		—			(802	)		—			(1,952	)		—			(2,926	)

Net cash used in investing activities		(2,661	)		(4,691	)		(5,414	)		(13,159	)		(11,401	)		(9,006	)

Cash flows from financing activities:
Short-term debt, additions		323			508			1			1,285			1,076			4,483
Short-term debt, repayments		(379	)		(459	)		(125	)		(1,254	)		(1,311	)		(5,040	)
Loans
Related parties
Loan proceeds		16			—			33			16			54			259
Repayments		(15	)		(135	)		—			(373	)		(20	)		(273	)
Issuances of long-term debt
Third parties		1,537			1,086			253			3,104			1,890			7,212
Repayments of long-term debt
Third parties		(48	)		(97	)		(65	)		(307	)		(1,130	)		(11,130	)
Treasury stock		—			1			(752	)		(9	)		(752	)		—
Mandatorily convertible notes		—			934			—			934			—			1,869
Capital increase		—			—			—			—			12,190			—
Dividends and interest attributed to Company’s stockholders		(1,469	)		—			(1,600	)		(2,724	)		(2,850	)		(1,875	)
Dividends and interest attributed to noncontrolling interest		(47	)		—			(56	)		(47	)		(143	)		(714	)

Net cash provided by (used in) financing activities		(82	)		1,838			(2,311	)		625			9,004			(5,209	)

Increase (decrease) in cash and cash equivalents		(1,332	)		(359	)		(1,432	)		(5,398	)		14,717			(3,203	)
Effect of exchange rate changes on cash and cash equivalents		167			625			(2,863	)		2,360			(5,432	)		(199	)
Cash and cash equivalents, beginning of period		8,458			8,192			14,626			10,331			1,046			4,448

Cash and cash equivalents, end of period		7,293			8,458			10,331			7,293			10,331			1,046

Cash paid during the period for:
Interest on short-term debt		—			(1	)		—			(1	)		(11	)		(49	)
Interest on long-term debt		(289	)		(236	)		(314	)		(1,113	)		(1,255	)		(1,289	)
Income tax		(973	)		(130	)		(149	)		(1,331	)		(2,867	)		(3,284	)
Non-cash transactions
Interest capitalized		77			74			185			266			230			78

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Changes in Stockholders’ Equity
Expressed in millions of United States dollars
(Except number of shares)


	Three-month period ended (unaudited)
	December			September			December			Year ended of December, 31
	31, 2009			30, 2009			31, 2008			2009			2008			2007
Preferred class A stock (including twelve special shares)
Beginning of the period		9,727			9,727			9,727			9,727			4,953			4,702
Capital increase		—			—			—			—			4,774			—
Transfer from undistributed retained earnings		—			—			—			—			—			251

End of the period		9,727			9,727			9,727			9,727			9,727			4,953

Common stock
Beginning of the period		15,262			15,262			15,262			15,262			7,742			3,806
Capital increase		—			—			—			—			7,520			—
Transfer from undistributed retained earnings		—			—			—			—			—			3,936

End of the period		15,262			15,262			15,262			15,262			15,262			7,742

Treasury stock
Beginning of the period		(1,150	)		(1,151	)		(389	)		(1,141	)		(389	)		(389	)
Acquisitions		—			1			(752	)		(9	)		(752	)		—

End of the period		(1,150	)		(1,150	)		(1,141	)		(1,150	)		(1,141	)		(389	)

Additional paid-in capital
Beginning of the period		411			393			393			393			498			498
Change in the period		—			18			—			18			(105	)		—

End of the period		411			411			393			411			393			498

Mandatorily convertible notes — common shares
Beginning of the period		1,578			1,288			1,288			1,288			1,288			1,288
Change in the period		—			290			—			290			—			—

End of the period		1,578			1,578			1,288			1,578			1,288			1,288

Mandatorily convertible notes — preferred shares
Beginning of the period		1,225			581			581			581			581			581
Change in the period		—			644			—			644			—			—

End of the period		1,225			1,225			581			1,225			581			581

Other cumulative comprehensive income (deficit)
Cumulative translation adjustments
Beginning of the period		(2,542	)		(6,385	)		(3,993	)		(11,493	)		1,340			(1,628	)
Change in the period		770			3,843			(7,500	)		9,721			(12,833	)		2,968

End of the period		(1,772	)		(2,542	)		(11,493	)		(1,772	)		(11,493	)		1,340

Unrealized gain (loss) — available-for-sale securities, net of tax
Beginning of the period		(1	)		49			(79	)		17			211			271
Change in the period		1			(50	)		96			(17	)		(194	)		(60	)

End of the period		—			(1	)		17			—			17			211

Surplus (deficit) accrued pension plan
Beginning of the period		346			75			(304	)		(34	)		75			353
Change in the period		(384	)		271			270			(4	)		(109	)		(278	)

End of the period		(38	)		346			(34	)		(38	)		(34	)		75

Cash flow hedge
Beginning of the period		13			1			28			—			29			—
Change in the period		(11	)		12			(28	)		2			(29	)		29

End of the period		2			13			—			2			—			29

Total other cumulative comprehensive income (deficit)		(1,808	)		(2,184	)		(11,510	)		(1,808	)		(11,510	)		1,655

Undistributed retained earnings
Beginning of the period		24,053			21,930			14,183			18,340			15,317			9,555
Transfer from/to unappropriated retained earnings		4,455			2,123			4,157			10,168			3,023			9,949
Capitalized earnings		—			—			—			—			—			(4,187	)

End of the period		28,508			24,053			18,340			28,508			18,340			15,317

Unappropriated retained earnings
Beginning of the period		7,624			8,107			14,521			9,616			1,631			2,505
Net income attributable to the stockholders’ Company		1,519			1,677			1,367			5,349			13,218			11,825
Interest on mandatorily covertible debt
Preferred class A stock		(19	)		(16	)		(15	)		(58	)		(46	)		(22	)
Common stock		(23	)		(21	)		(32	)		(93	)		(96	)		(45	)
Dividends and interest attributed to stockholders’ equity
Preferred class A stock		(570	)		—			(806	)		(570	)		(806	)		(1,049	)
Common stock		(894	)		—			(1,262	)		(894	)		(1,262	)		(1,634	)
Appropriation from/to undistributed retained earnings		(4,455	)		(2,123	)		(4,157	)		(10,168	)		(3,023	)		(9,949	)

End of the period		3,182			7,624			9,616			3,182			9,616			1,631

Total Company stockholders’ equity		56,935			56,546			42,556			56,935			42,556			33,276

Noncontrolling interests
Beginning of the period		2,798			2,477			2,211			1,892			2,180			2,465
Disposals and (acquisitions) of noncontrolling interests		(15	)		69			—			83			—			(817	)
Cumulative translation adjustments		79			209			(343	)		823			(445	)		333
Cash flow hedge		(30	)		12			(26	)		(18	)		(21	)		21
Net income attributable to noncontrolling interests		51			46			27			107			258			802
Dividends and interest attributable to noncontrolling interests		(52	)		(3	)		(1	)		(56	)		(137	)		(700	)
Capitalization of stockholders advances		—			(12	)		24			—			57			76

End of the period		2,831			2,798			1,892			2,831			1,892			2,180

Total stockholders’ equity		59,766			59,344			44,448			59,766			44,448			35,456


Number of shares:
Preferred class A stock (including twelve special shares)		2,108,579,618			2,108,579,618			2,108,579,618			2,108,579,618			2,108,579,618			1,919,516,400
Common stock		3,256,724,482			3,256,724,482			3,256,724,482			3,256,724,482			3,256,724,482			2,999,797,716
Buy-backs
Beginning of the period		(152,579,803	)		(152,623,603	)		(86,922,944	)		(151,792,203	)		(86,923,184	)		(86,927,072	)
Acquisitions		—			—			(64,869,259	)		(831,400	)		(64,869,259	)		—
Sales		—			43,800			—			43,800			240			3,888

End of the period		(152,579,803	)		(152,579,803	)		(151,792,203	)		(152,579,803	)		(151,792,203	)		(86,923,184	)

		5,212,724,297			5,212,724,297			5,213,511,897			5,212,724,297			5,213,511,897			4,832,390,932

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Comprehensive Income (deficit)
Expressed in millions of United States dollars


	Three-month period ended (unaudited)
	December			September			December			Year ended of December, 31
	31, 2009			30, 2009			31, 2008			2009			2008			2007

Comprehensive income (deficit) is comprised as follows:
Company’s stockholders:
Net income attributable to Company’s stockholders		1,519			1,677			1,367			5,349			13,218			11,825
Cumulative translation adjustments		770			3,843			(7,500	)		9,721			(12,833	)		2,968
Unrealized gain (loss) — available-for-sale securities
Gross balance as of the period/year end		1			(68	)		147			(47	)		(230	)		(123	)
Tax (expense) benefit		—			18			(51	)		30			36			63


		1			(50	)		96			(17	)		(194	)		(60	)
Surplus (deficit) accrued pension plan
Gross balance as of the period/year end		(578	)		377			350			10			(194	)		(410	)
Tax (expense) benefit		194			(106	)		(80	)		(14	)		85			132

		(384	)		271			270			(4	)		(109	)		(278	)

Cash flow hedge
Gross balance as of the period/year end		(2	)		12			(28	)		11			(29	)		29
Tax (expense) benefit		(9	)		—			—			(9	)		—			—

		(11	)		12			(28	)		2			(29	)		29


Total comprehensive income (deficit) attributable to Company’s stockholders		1,895			5,753			(5,795	)		15,051			53			14,484


Noncontrolling interests:
Net income attributable to noncontrolling interests		51			46			27			107			258			802
Cumulative translation adjustments		79			209			(343	)		823			(445	)		333
Cash flow hedge		(30	)		12			(26	)		(18	)		(21	)		21

Total comprehensive income (deficit) attributable to Noncontrolling interests		100			267			(342	)		912			(208	)		1,156

Total comprehensive income (deficit)		1,995			6,020			(6,137	)		15,963			(155	)		15,640

The accompanying notes are an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements
Expressed in millions of United States dollars, unless otherwise stated

The Company and its operations

Vale S.A., formerly Companhia Vale do Rio Doce, (“Vale”, the “Company” or “we”) is a limited liability company incorporated in Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production, logistics and steel activities.

At December 31, 2009, our principal consolidated operating subsidiaries are the following:

% voting

head office

Subsidiary

% ownership

capital

location

Principal activity

Alumina do Norte do Brasil S.A. — Alunorte

57.03

59.02

Brazil

Alumina

Alumínio Brasileiro S.A. — Albras

51.00

Brazil

Aluminum

CADAM S.A.

61.48

100.00

Brazil

Kaolin

CVRD Overseas Ltd.

100.00

Cayman Islands

Trading

Vale Colombia Ltd.

100.00

Colombia

Coal

Ferrovia Centro-Atlântica S. A.

99.99

Brazil

Logistic

Ferrovia Norte Sul S.A.

100.00

Brazil

Logistic

Mineração Corumbá Reunidas S.A.

100.00

Brazil

Iron ore

Pará Pigmentos S.A.

86.17

85.57

Brazil

Kaolin

PT International Nickel Indonesia Tbk

59.09

Indonesia

Nickel

Vale Manganése Norway

100.00

Norway

Ferroalloys

Vale Manganês S.A.

100.00

Brazil

Manganese and Ferroalloys

Vale Manganèse France

100.00

France

Ferroalloys

Vale Australia Pty Ltd.

100.00

Australia

Coal

Vale Inco Limited

100.00

Canada

Nickel

Vale International S.A.

100.00

Switzerland

Trading

Basis of consolidation

All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method (Note 13).

We evaluate the carrying value of our equity accounted investments in relation to publicly quoted market prices when available. If the quoted market price is below book value, and such decline is considered other than temporary, we write-down our equity investments to quoted market value.

We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a stockholders agreement. We define affiliates as businesses in which we participate as a minority stockholder but with significant influence over the operating and financial policies of the investee.

Our participation in hydroelectric projects is made via consortium contracts under which we have undivided interests in the assets and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations. No separate legal or tax status is granted to consortia under Brazilian law. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects (Note 12).

Summary of significant accounting policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, the selection of useful lives of property, plant and equipment, impairment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired in business combinations, income tax valuation allowances, employee post retirement benefits and other similar evaluations. Actual results could differ from those estimated.

a) Basis of presentation

We have prepared our consolidated financial statements in accordance with United States generally accepted accounting principles (“US GAAP”), which differ in certain respects from the accounting practices adopted in Brazil “Brazilian GAAP” which are the basis for our statutory financial statements.

These financial statements reflect the retrospective adoption of the Noncontrolling Interests in Consolidated Financial Statements Standard, as of December 31, 2008 and the three years them ended. The noncontrolling interest standard, which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, as shown in the consolidated statements of changes in stockholders’ equity and consolidated statements of comprehensive income (deficit). Noncontrolling interests that could be redeemed upon the occurrence of certain events outside the Company’s control have been classified as redeemable noncontrolling interest using the mezzanine presentation on the balance sheet between liabilities and stockholders’ equity, retroactively to all periods presented.

Since December 2007, significant modifications have been made to Brazilian GAAP as part of a convergence project with International Financial Reporting Standards (IFRS) and as from 2010 full year financial statements the convergence will be completed and therefore the IFRS will be the accounting practice adopted in Brazil. The Company does not expect to discontinue the USGAAP reporting during 2010.

Our consolidated interim financial information for the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008, presented herein are unaudited. However, in our opinion, such consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for interim periods.

The Brazilian Real is the parent Company’s functional currency. We have selected the US dollar as our reporting currency.

All assets and liabilities have been translated to US dollars at the closing rate of exchange at each balance sheet date (or, if unavailable, the first available exchange rate). All statement of income accounts have been translated to US dollars at the average exchange rates prevailing during the respective periods. Capital accounts are recorded at historical exchange rates. Translation gains and losses are recorded in the Cumulative Translation Adjustments account (“CTA”) in stockholders’ equity.

The results of operations and financial position of our entities that have a functional currency other than the US dollar, have been translated into US dollars and adjustments to translate those statements into US dollars are recorded in the CTA in stockholders’ equity.

The exchange rates used to translate the assets and liabilities of the Brazilian operations at December 31, 2009 and 2008, were R$1.7412 and R$2.3370, respectively.

The net transaction gain (loss) included in our statement of income (“Foreign exchange and indexation gains (losses), net”) was US$665, US$(1,101) and US$1,639 in the years ended December 31, 2009, 2008 and 2007, respectively.

The Company has performed an evaluation of subsequent events through February 10, 2010 which is the date the financial statements were issued.

b) Cash equivalents and short-term investments

Cash flows from overnight investments and fundings are reported net. Short-term investments that have a ready market and original maturities of 90 days or less are classified as “Cash equivalents”. The remaining investments, with between 91 days and 360 days maturities are stated at fair value and presented as “Short-term investments”.

c) Long-term

Assets and liabilities that are realizable or due more than 12 months after the balance sheet date are classified as long-term.

d) Inventories

Inventories are recorded at the average cost of purchase or production, reduced to market value (net realizable value less a reasonable margin) when lower. Stockpiled inventories are accounted for as processed when they are removed from the mine. The cost of finished goods comprises depreciation and all direct costs necessary to convert stockpiled inventories into finished goods.

We classify proven and probable reserve quantities attributable to stockpiled inventories as inventories. These reserve quantities are not included in the total proven and probable reserve quantities used in the units of production, depreciation, depletion and amortization calculations.

We periodically assess our inventories to identify obsolete or slow moving inventories, and if needed we recognize definitive allowances for them.

e) Removal of waste materials to access mineral deposits

Stripping costs (the costs associated with the removal of overburden and other waste materials) incurred during the development of a mine, before production commences, are capitalized as part of the depreciable cost of developing the property. Such costs are subsequently amortized over the useful life of the mine based on proven and probable reserves.

Post-production stripping costs are included in the cost of the inventory produced (that is extracted), at each mine individually during the period that the stripping cost are incurred.

f) Property, plant and equipment and intangible assets

Property, plant and equipment are recorded at cost, including interest cost incurred during the construction of major new facilities. We compute depreciation on the straight-line method at annual average rates which take into consideration the useful lives of the assets, as follows: 3.73% for railroads, 1.5% for buildings, 4.23% for installations and 7.73% for other equipment. Expenditures for maintenance and repairs are charged to operating costs and expenses as incurred.

We capitalize the costs of developing major new ore bodies or expanding the capacity of operating mines and amortize these to operations on the unit-of-production method based on the total probable and proven quantity of ore to be recovered. Exploration costs are expensed. Once the economic viability of mining activities is established, subsequent development costs are capitalized.

Separately acquired intangible assets are shown at historical cost. Intangible assets acquired in a business combination are recognized at fair value at the acquisition date. All our intangible assets have definite useful lives and are carried at cost less accumulated amortization, which is calculated using the straight-line method over their estimated useful lives.

g) Business combinations

We adopt business combinations to record acquisitions of interests in other companies. This “purchase method”, requires that we reasonably determine the fair value of the identifiable tangible and intangible assets and liabilities of acquired companies and segregate goodwill as an intangible asset.

We assign goodwill to reporting units and test each reporting unit’s goodwill for impairment at least annually, and whenever circumstance indicating that recognized goodwill may not be fully recovered are identified. We perform the annual goodwill impairment tests during the last quarter of the year.

Goodwill is reviewed for impairment utilizing a two step process. In the first step, we compare a reporting unit’s fair value with its carrying amount to identify any potential goodwill impairment loss. If the carrying amount of a reporting unit exceeds the unit’s fair value, based on a discounted cash flow analysis, we carry out the second step of the impairment test, measuring and recording the amount, if any, of the unit’s goodwill impairment loss.

h) Impairment of long-lived assets

All long-lived assets, are tested to determine if they are recoverable from operating earnings on an undiscounted cash flow basis over their useful lives whenever events or changes in circumstance indicate that the carrying value may not be recoverable.

When we determine that the carrying value of long-lived assets and definite-life intangible assets may not be recoverable, we measure any impairment loss based on a projected discounted cash flow method using a discount rate determined to be commensurate with the risk inherent in our current business model.

i) Available-for-sale equity securities

Equity securities classified as “available-for-sale” are recorded pursuant to accounting for certain investments in debt and equity securities. Accordingly, we classify unrealized holding gains and losses, net of taxes, as a separate component of stockholders’ equity until realized.

j) Compensated absences

The liability for future compensation for employee vacations is fully accrued as earned.

k) Derivatives and hedging activities

We apply accounting for derivative financial instruments and hedging activities, as amended. This standard requires that we recognize all derivative financial instruments as either assets or liabilities on our balance sheet and measure such instruments at fair value. Changes in the fair value of derivatives are recorded in each period in current earnings or in other comprehensive income, in the latter case depending on whether a transaction is designated as an effective hedge and has been effective during the period.

l) Asset retirement obligations

Our retirement obligations consist primarily of estimated closure costs, the initial measurement of which is recognized as a liability discounted to present value and subsequently accreted through earnings. An asset retirement cost equal to the initial liability is capitalized as part of the related asset’s carrying value and depreciated over the asset’s useful life.

m) Revenues and expenses

Revenues are recognized when title is transferred to the customer or services are rendered. Revenue from exported products is recognized when such products are loaded on board the ship. Revenue from products sold in the domestic market is recognized when delivery is made to the customer. Revenue from logistic services is recognized when the service order has been fulfilled. Expenses and costs are recognized on the accrual basis.

n) Income taxes

The deferred tax effects of tax loss carryforwards and temporary differences are recognized pursuant to accounting for income taxes. A valuation allowance is made when we believe that it is more likely than not that tax assets will not be fully recovered in the future.

o) Earnings per share

Earnings per share are computed by dividing net income by the weighted average number of common and preferred shares outstanding during the period.

p) Interest attributed to stockholders’ equity (dividend)

Brazilian corporations are permitted to distribute interest attributable to stockholders’ equity. The calculation is based on the stockholders’ equity amounts as stated in the statutory accounting records and the interest rate applied may not exceed the long-term interest rate (TJLP) determined by the Brazilian Central Bank. Also, such interest may not exceed 50% of net income for the year nor 50% of retained earnings plus revenue reserves as determined by “Brazilian GAAP”.

As the notional interest charge is tax deductible in Brazil, the benefit to us, as opposed to making a dividend payment, is a reduction in our income tax charge. Income tax of 15% is withheld on behalf of the stockholders relative to the interest distribution. Under Brazilian law, interest attributed to stockholders’ equity is considered as part of the annual minimum mandatory dividend (Note 17). This notional interest distribution is treated for accounting purposes as a deduction from stockholders’ equity in a manner similar to a dividend and the tax credit recorded in income.

q) Pension and other post retirement benefits

We sponsor private pensions and other post retirement benefits for our employees which are actuarially determined and recognized as an asset or liability or both depending on the funded or unfunded status of each plan in accordance with employees’ accounting for defined benefit pension and other post retirement plans”. The cost of our defined benefit and prior service costs or credits that arise during the period and are not components of net periodic benefit costs are recorded in other cumulative comprehensive income (deficit).

Accounting pronouncements

a) Newly issued accounting pronouncements

Accounting Standards Update (ASU) number 2010-06 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 and are expected to provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The Company will adopt this update in 2010 and does not expect relevant impacts on fair value information currently disclosed.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued an amendment to Interpretation No. 46(R) on the accounting and disclosure requirements for the consolidation of variable interest entities (“VIEs”). Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-17 Amendments to FASB Interpretation No. 46(R) was issued. The amendments replace the quantitative-based risks and rewards calculation, for determining which reporting entity has a controlling financial interest in a VIE, with a qualitative analysis when determining whether or not it must consolidate a VIE. The newly required approach is focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. The amendments also require an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendments eliminated the scope exception on qualifying special-purpose entities (“QSPE”) and require enhanced disclosures about: involvement with VIEs, significant changes in risk exposures, impacts on the financial statements, and, significant judgments and assumptions used to determine whether or not to consolidate a VIE. The Company will adopt these amendments in 2010. We are currently assessing the potential impacts of this pronouncement and do not expect major changes to the reported financial information.

In June 2009, the “FASB” issued an amendment to the accounting and disclosure requirements for transfers of financial assets. Subsequently, in December 2009, the Accounting Standards Update (ASU) number 2009-16 Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140 was issued. The amendments improve financial reporting requiring greater transparency and additional disclosures for transfers of financial assets and the entity’s continuing involvement with them and also change the requirements for derecognizing financial assets. In addition, the amendments eliminate the exceptions for QSPE from the consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. The Company will adopt the amendments in 2010 and do not expect major effect to its financial statements.

Accounting Standards Update (ASU) number 2009-08 Earning per share issued by the FASB provides additional guidance related to calculation of earnings per share. This guidance amends ASC 260.

The Company understands that the other recently issued accounting pronouncements, that are not effective as of and for the year ended December 31, 2009, are not expected to be relevant for its consolidated financial statements.

b) Accounting standards adopted in 2009

Accounting Standards Update (ASU) number 2009-05 Fair value measurements and disclosures issued by the FASB provides additional guidance related to address the lack of observable market information to measure the fair value of a liability. This guidance amends ASC 820. It is effective after the issuance. The Company already adopts this statements.

In June 2009, the FASB issued the FASB Accounting Standards Codification (Codification). The Codification became the single source for all authoritative GAAP recognized by the FASB to be applied for financial statements issued for periods ending after September 15, 2009. The Codification does not change GAAP and does not have an affect on our financial position, results of operations or liquidity.

In June 2009, we adopted a newly issued accounting standard for accounting and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this statement sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The standard is effective for interim or annual periods ending after June 15, 2009. The Company already adopts this statement.

In June 2009, we adopted a newly issued accounting standard for fair value of financial instruments which requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This standard also requires these disclosures in summarized financial information at interim reporting periods. This standard shall be effective for interim reporting periods ending after June 15, 2009, and we have not opted for early adoption of this standard for the three-month period ended March 31, 2009. The application of this standard will expand the Company’s disclosures regarding the use of fair value in interim periods. The required information is disclosed in Note 22 (d).

In January 2009, we adopted a newly issued accounting standard regarding disclosure of derivative instruments and hedging activities. As such, entities must now provide qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gain and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements on a quarterly basis regarding how and why the entity uses derivatives, how derivatives and related hedged items are accounted for under the new standard and how derivatives and related hedged items affect the entity’s financial position, performance and cash flows. The required information is disclosed in Note 25. In addition, unrealized gains or losses on derivatives, previously reported net on balance sheet are presented gross as assets and liabilities. Comparative information for 2008 have been reclassified.

In January 2009, we adopted a newly issued accounting standard for noncontrolling interests. This new accounting standard clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and consolidated statements of changes in stockholders’ equity. Noncontrolling interests that could be redeemed upon the occurrence of certain events outside the Company’s control have been classified as redeemable noncontrolling interest using the mezzanine presentation on the balance sheet between liabilities and stockholders’ equity, retroactive to all periods presented.

In January 2009, we adopted a newly issued accounting standard that applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

Major acquisitions and disposals

a) Mineração Corumbá Reunidas S.A.

In September 2009, we acquired from Rio Tinto Plc, Mineração Corumbá Reunidas S.A. (MCR). MCR is the owner of an iron ore mining operations with high iron content and a strategic importance to our product portfolio, adding a substantial volume of lump ore to our reserves.

The purchase price allocation for Mineração Corumbá Reunidas S.A. is as follows:


	Valuation

Total disbursements (*)		814
Cash acquired		(12	)

Purchase price		802

Book value of assets acquired and liabilities assumed, net of cash acquired		(240	)

Adjustment to fair value of inventory		(84	)
Adjustment to fair value of property, plant and equipment		(754	)
Adjustment to fair value of intangible assets		(14	)
Deferred taxes on the above adjustments		290


Total fair value adjustment		(562	)


(*)		Including the payment related to working capital adjustment

The acquired business contributed revenues of US$24 and net profit of US$(16) to our for the period from October 1, 2009 to December 31, 2009.If the acquisition had occurred on January 1, 2009, our revenue would have been US$52, and profit before tax would have been US$(88). These amounts have been calculated using the Company’s accounting policies and by adjusting the results of the subsidiary to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangibles assets had applied from January 1, 2009.

b) Diamond Coal Ltd

In March 2009, we acquired 100% of Diamond Coal Ltd that owns coal assets in Colombia for US$300, from Cement Argos. Cash payment was made during the quarter ending June 30, 2009.

The primary reason for the acquisition was that the coal assets are an important part of our growth strategy. Therefore, Vale is seeking to build a coal asset platform in Colombia, as it is the world’s third largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value.

The purchase price allocation for Diamond Coal Ltd. is as follows:


	Valuation

Total disbursements		300

Adjustment to fair value of property, plant and equipment		(280	)
Deferred taxes on above adjustments		92


Total adjustment		(188	)

c) Green Mineral Resources

In February 2009, acquired Green Mineral Resources that owns the Regina Project (Canada) and Colorado Project (Argentina) which are in development stage, from Rio Tinto, for US$850.

The acquisition of potash assets is aligned with Vale’s strategy to become a large producer of fertilizers to benefit from the exposure to rising global consumption.

The purchase price allocation for Green Mineral Resources is as follows:


	Valuation

Total disbursements		857
Cash acquired		(7	)

Purchase price		850

Book value of assets acquired and liabilities assumed, net of cash acquired		(97	)

Adjustment to fair value of property, plant and equipment		(1,159	)
Deferred taxes on above adjustments		406


Total adjustment		(753	)

d) Other transactions

In September 2009, we concluded an agreement with ThyssenKrupp Steel AG signed in July, to increase our stake in ThyssenKrupp CSA Siderúrgica do Atlântico Ltda. (CSA) to 26.87%, from through a capital subscripton of US$1,424.

In April 2009, we concluded the sale of all common shares we held in, Usiminas Siderúrgicas de Minas Gerais S.A. — Usiminas, for US$273 generating a gain of US$153.

In March 2009, we acquired 50% of the joint venture with African Rainbow Minerals Limited of Teal Minerals Incorporated for US$60.

In February 2008, we sold our interest in Jubilee Mines N.L. (held through Vale Inco), representing 4.83% of its common shares, for US$134 generating a gain of US$80.

Income taxes

Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal tax. The statutory composite enacted tax rate applicable in the periods presented is 34%. In other countries where we have operations, the applicable tax rates vary from 1.67% to 40%.

We analyze the potential tax impact associated with undistributed earnings by each of our subsidiaries. For those subsidiaries in which the undistributed earnings would be taxable when remitted to the parent company, but we meet the criteria in paragraph 12 of APB 23, no deferred tax is recognized.

The amount reported as income tax expense in our consolidated financial statements is reconciled to the statutory rates as follows:


	Three-month period ended (unaudited)
	December 31, 2009									September 30, 2009									December 31, 2008
	Brazil			Foreign			Total			Brazil			Foreign			Total			Brazil			Foreign			Total
Income before income taxes, equity results and noncontrolling interests		419			324			743			2,894			(400	)		2,494			(2,489	)		2,573			84
Exchange variation (not taxable) or not deductible		—			446			446			—			929			929			—			(1,962	)		(1,962	)

		419			770			1,189			2,894			529			3,423			(2,489	)		611			(1,878	)

Tax at Brazilian composite rate		(142	)		(262	)		(404	)		(984	)		(180	)		(1,164	)		846			(208	)		638
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		502			—			502			—			—			—			238			—			238
Difference on tax rates of foreign income		—			418			418			—			169			169			—			347			347
Tax incentives		66			—			66			6			—			6			(48	)		—			(48	)
Other non-taxable, income/non deductible expenses		17			157			174			(20	)		83			63			(68	)		78			10

Income tax per consolidated statements of income		443			313			756			(998	)		72			(926	)		968			217			1,185


	Year ended of December, 31
	2009									2008									2007
	Brazil			Foreign			Total			Brazil			Foreign			Total			Brazil			Foreign			Total
Income before income taxes, equity results and noncontrolling interests		10,024			(2,901	)		7,123			2,434			10,783			13,217			7,769			7,464			15,233
Exchange variation (not taxable) or not deductible		—			5,162			5,162			—			(2,887	)		(2,887	)		—			853			853

		10,024			2,261			12,285			2,434			7,896			10,330			7,769			8,317			16,086

Tax at Brazilian composite rate		(3,408	)		(769	)		(4,177	)		(828	)		(2,685	)		(3,513	)		(2,641	)		(2,828	)		(5,469	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		502			—			502			692			—			692			474			—			474
Difference on tax rates of foreign income		—			1,079			1,079			—			1,728			1,728			—			1,729			1,729
Tax incentives		148			—			148			53			—			53			173			—			173
Other non-taxable, income/non deductible expenses		100			248			348			287			218			505			80			(188	)		(108	)

Income taxes per consolidated statements of income		(2,658	)		558			(2,100	)		204			(739	)		(535	)		(1,914	)		(1,287	)		(3,201	)

Vale and some related companies in Brazil were granted with a tax incentive that provides for a partial reduction of the income tax due related to certain regional operations of iron ore, railroad, manganese, copper, bauxite, alumina, aluminum, kaolin and potash. The tax benefit is calculated based on taxable profit adjusted by the tax incentive (so-called “exploration profit”) taking into consideration the operational profit of the projects that benefit from the tax incentive during a fixed period. In general, such tax incentives expire in 2018. Part of the northern railroad and iron ore operations have been granted with tax incentives for a period of 10 years starting as from 2009. The tax saving must be registered in a special capital (profit) reserve in the net equity of the entity that benefits from the tax incentive and cannot be distributed as dividends to the stockholders.

We are also allowed to reinvest part of the tax savings in the acquisition of new equipment to be used in the operations that enjoy the tax benefit subject to subsequent approval from the Brazilian regulatory agencies Superintendência de Desenvolvimento da Amazônia — SUDAM and Superintendência de Desenvolvimento do Nordeste — SUDENE. When the reinvestment is approved, the corresponding tax benefit must also be accounted in a special profit reserve and is also subject to the same restrictions with respect to future dividend distributions to the stockholders.

We also have income tax incentives related to our Goro project under development in New Caledonia (“The Goro Project”). These incentives include an income tax holiday during the construction phase of the project and throughout a 15-year period commencing in the first year in which commercial production, as defined by the applicable legislation, is achieved followed by a five-year, 50 per cent income tax holiday. The Goro Project also qualifies for certain exemptions from indirect taxes such as import duties during the construction phase and throughout the commercial life of the project. Certain of these tax benefits, including the income tax holiday, are subject to an earlier phase out should the project achieve a specified cumulative rate of return. We are subject to a branch profit tax commencing in the first year in which commercial production is achieved, as defined by the applicable legislation. To date, We have not recorded any taxable income for New Caledonian tax purposes. The benefits of this legislation are expected to apply with respect to taxes payable once the Goro Project is in operation. We obtained tax incentives for its projects in Mozambique, Oman and Malaysia, that will take effects when those projects start their commercial operation.

We are subject to examination by the tax authorities for up to five years regarding our operations in Brazil, up to ten years for Indonesia, and up to seven years for Canada for income taxes.

Brazilian tax loss carryforwards have no expiration date, though offset is restricted to 30% of annual taxable income.

On January 1, 2007, Company adopted the provisions Accounting for Uncertainty in Income Taxes.

The reconciliation of the beginning and ending amounts is as follows: (see note 20(b)) tax — related actions)


	Three-month period ended (unaudited)
	December			September			December			Year ended of December, 31
	31, 2009			30, 2009			31, 2008			2009			2008			2007
Beginning and end of the period		812			761			1,004			657			1,046			663

Increase resulting from tax positions taken		6			20			(269	)		47			103			264
Decrease resulting from tax positions taken		(439	)		(34	)		91			(474	)		(261	)		(47	)
Changes in tax legislation		—			—			—			—			2			29
Cumulative translation adjustments		17			65			(169	)		166			(233	)		137


End of the period		396			812			657			396			657			1,046

There has been write-off of values provisioned referring to discussion about compensation for taxes losses and negative basis of social contribution above 30% due to withdrawal of the action and therefore the extinction of process with release of funds deposited in escrow in favor of the Union.

Recognized deferred income tax assets and liabilities are composed as follows:


	As of December 31
	2009			2008
Current deferred tax assets
Accrued expenses deductible only when disbursed		852			583


Long-term deferred tax assets and liabilities

Assets
Employee postretirement benefits provision		384			171
Tax loss carryforwards		324			119
Other temporary differences		842			548
Asset retirement obligation		259			207

		1,809			1,045

Liabilities
Unrealized tax indexation effects		(154	)		(108	)
Property, plant and equipment		(79	)		(47	)
Prepaid retirement benefit		(435	)		(199	)
Fair value adjustments in business combinations		(5,929	)		(4,446	)
Social contribution		(758	)		—
Other temporary differences		(103	)		(128	)

		(7,458	)		(4,928	)

Valuation allowance
Beginning balance		(122	)		(104	)
Translation adjustments		(25	)		18
Change in allowance		41			(36	)

Ending balance		(106	)		(122	)

Net long-term deferred tax liabilities		(5,755	)		(4,005	)

Cash and cash equivalents


	As of December 31
	2009		2008

Cash		728		767
Short-term investments		6,565		9,564

		7,293		10,331

All the above mentioned short-term investments are made through the use of low risk fixed income securities, in a way that: the ones denominated in Brazilian reais are concentrated in investments indexed to the CDI, and the ones denominated in US dollars are mainly time deposits, with the original due date less than three-months.

Short-term investments


	As of December 31
	2009		2008

Time deposit		3,747		2,308

Represent low risk investments with original due date over three-month.

Account receivable


	As of December 31
	2009			2008

Customers
Denominated in Brazilian Reais		885			461
Denominated in other curriencies, mainly US dollars		2,362			2,828

		3,247			3,289

Allowance for doubtful accounts		(127	)		(85	)

Total		3,120			3,204

Accounts receivable from customers in the steel industry represent 51.1% of receivables at December 31, 2009.

No single customer accounted for more than 10% of total revenues.

Additional allowances for doubtful accounts charged to the statement of income as expenses in 2009 and 2008 totaled US$48 and US$9, respectively. We wrote-off US$8 in 2009 and US$ nil in 2008.

Inventories


	As of December 31
	2009		2008

Finished products

Nickel (co-products and by-products)		1,083		1,514
Iron ore and pellets		677		728
Manganese and ferroalloys		164		199
Aluminum products		135		150
Kaolin		42		40
Copper concentrate		35		26
Coal		51		43
Others		51		80
Spare parts and maintenance supplies		958		1,116

		3,196		3,896

In 2009, there were no adjustments to reduce inventories to the market value. In 2008 we recorded an adjustment to reduce nickel inventory, in an amount of US$ 77.

Recoverable taxes


	As of December 31
	2009		2008

Income tax		908		1,646
Value-added tax — ICMS		290		258
PIS and COFINS		1,052		380
Others		78		103

Total		2,328		2,387


Current		1,511		1,993
Non-current		817		394

		2,328		2,387

Property, plant and equipment and intangible assets

By type of assets:


	As of December 31, 2009						As of December 31, 2008
			Accumulated						Accumulated
	Cost		Depreciation		Net		Cost		Depreciation		Net
Land		284		—		284		182		—		182
Buildings		4,324		1,143		3,181		3,742		905		2,837
Installations		14,063		4,160		9,903		9,990		2,748		7,242
Equipment		7,499		2,380		5,119		5,391		1,626		3,765
Railroads		6,685		2,016		4,669		5,830		1,358		4,472
Mine development costs		20,205		2,957		17,248		15,976		2,062		13,914
Others		10,418		3,123		7,295		4,974		1,639		3,335

		63,478		15,779		47,699		46,085		10,338		35,747
Construction in progress		19,938		—		19,938		12,707		—		12,707

Total		83,416		15,779		67,637		58,792		10,338		48,454

Losses on disposal of property, plant and equipment totaled US$293, US$376 and US$168 in 2009, 2008 and 2007, respectively. Mainly relate to losses on sales of ships and trucks, locomotives and other equipment, which were replaced in the normal course of business.

Assets given in guarantee of judicial processes totaled US$222 as at December 31, 2009.

Hydroelectric assets

We participate in several jointly-owned hydroelectric plants, already in operation or under construction, in which we record our undivided interest in these assets as Property, plant and equipment.

At December 31, 2009 the cost of hydroelectric plants in service totals US$1,382 (December 31, 2008 US$1,162) and the related depreciation in the year was US$372 (December 31, 2008 US$304). The cost of hydroelectric plant under construction at December 31, 2009 totals US$521 (December 31, 2008 US$206). Income and operating expenses for such plants are not material.

Intangibles

All of the intangible assets recognized in our financial statements were acquired from third parties, either directly or through a business combination and have definite useful lives from 6 to 30 years.

At December 31, 2009 the intangibles amount to US$1,173 (December 31, 2008 — US$875), and are comprised of rights granted by the government — North-South Railroald of US$924 and off take-agreements of US$239.

Investments in affiliated companies and joint ventures


	December 31, 2009															Equity in earnings (losses) of investee adjustments																		Dividends Received
								Net								Three-month period ended																		Three-month period ended
								income								(unaudited)																		(unaudited)
	Participation in							(loss) of			Investments					December			September			December			Year ended of December, 31									December		September		December		Year ended of December, 31
	capital (%)				Net equity			the period			2009			2008		31, 2009			30, 2009			31, 2008			2009			2008			2007			31, 2009		30, 2009		31, 2008		2009		2008		2007
	Voting		Total
Ferrous
Companhia Nipo-Brasileira de Pelotização — NIBRASCO (1)		51.11		51.00		260			(25	)		132			110		(15	)		(5	)		18			(12	)		84			12			—		—		—		20		—		—
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (1)		51.00		50.89		164			(23	)		83			73		(3	)		(1	)		7			(12	)		59			9			—		—		—		—		6		16
Companhia Coreano-Brasileira de Pelotização — KOBRASCO (1)		50.00		50.00		118			(34	)		59			55		(9	)		(23	)		4			(17	)		44			19			—		—		13		—		13		21
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (1)		51.00		50.90		177			23			90			58		4			5			14			12			34			10			—		—		—		—		—		8
Minas da Serra Geral SA — MSG		50.00		50.00		61			3			31			21		—			1			(1	)		2			1			3			—		—		—		—		—		—
SAMARCO Mineração SA — SAMARCO (2)		50.00		50.00		1,224			598			673			412		58			110			37			299			315			242			140		—		50		190		300		150
Baovale Mineração SA — BAOVALE		50.00		50.00		61			1			30			26		1			—			1			(3	)		6			6			—		—		—		—		—		—
Zhuhai YPM Pellet e Co,Ltd — ZHUHAI		25.00		25.00		51			12			13			13		3			1			3			3			7			—			—		—		—		—		—		—


												1,111			768		39			88			83			272			550			301			140		—		63		210		319		195
Logistic
LOG-IN Logística Intermodal SA		31.33		31.33		374			5			125			94		—			—			6			2			20			8			—		—		—		3		3		—
MRS Logística SA		37.86		41.50		1,126			340			468			326		65			34			87			141			113			117			90		—		—		124		34		51


												593			420		65			34			93			143			133			125			90		—		—		127		37		51
Holdings

Steel

California Steel Industries Inc — CSI		50.00		50.00		300			(21	)		150			160		(2	)		2			(35	)		(10	)		11			(1	)		—		—		13		—		13		11
THYSSENKRUPP CSA Companhia Siderúrgica (5)		26.87		26.87		7,971			(6	)		2,049			443		(6	)		—			—			(6	)		—			—			—		—		—		—		—		—
Usinas Siderúrgicas de Minas Gerais SA — USIMINAS (4)		—		—		—			—			—			164		—			—			—			8			18			31			—		—		—		7		18		31


		—		—		—			—			2,199			767		(8	)		2			(35	)		(8	)		29			30			—		—		13		7		31		42

Bauxite

Mineração Rio do Norte SA — MRN		40.00		40.00		356			(24	)		143			140		(32	)		10			22			(10	)		62			84			13		—		13		42		99		64


												143			140		(32	)		10			22			(10	)		62			84			13		—		13		42		99		64
Coal
Henan Longyu Resources Co Ltd		25.00		25.00		999			295			250			176		18			24			15			74			79			46			—		—		27		—		27		42
Shandong Yankuang International Company Ltd		25.00		25.00		(27	)		(71	)		(7	)		11		(4	)		(3	)		(17	)		(18	)		(17	)		—			—		—		—		—		—		—

												243			187		14			21			(2	)		56			62			46			—		—		27		—		27		42

Copper
Teal Minerals Incorpored (3)		50.00		50.00		160			(34	)		80			—		(8	)		—			—			(18	)		—			—			—		—		—		—		—		—


												80			—		(8	)		—			—			(18	)		—			—			—		—		—		—		—		—

Nickel
Heron Resources Inc (cost US$24) — available-for-sale		—		—		—			—			8			2		—			—			—			—			—			—			—		—		—		—		—		—
Mirabela Nickel Ltd — available-for-sale		—		—		—			—			—			8		—			—			—			—			—			—			—		—		—		—		—		—
Hudbay Minerals — available for sale		—		—		—			—			—			9		—			—			—			—			—			—			—		—		—		—		—		—
Korea Nickel Corp		—		—		—			—			13			21		—			—			—			—			—			—			—		—		—		—		—		—
Skye Resources		—		—		—			—			—			—		—			—			(38	)		—			(38	)		—			—		—		—		—		—		—
Others — available for sale		—		—		—			—			9			13		—			—			4			—			4			9			—		—		—		—		—		—


		—		—		—			—			30			53		—			—			(34	)		—			(34	)		9			—		—		—		—		—		—
Other affiliates and joint ventures
Vale Soluções em energia		51.00		51.00		194			—			99			42		—			—			—			—			—			—			—		—		—		—		—		—
Others		—		—		—			—			87			31		1			—			(2	)		(2	)		(8	)		—			—		—		—		—		—		—


												186			73		1			—			(2	)		(2	)		(8	)		—			—		—		—		—		—		—


												2,881			1,220		(33	)		33			(51	)		18			111			169			13		—		53		49		157		148

Total												4,585			2,408		71			155			125			433			794			595			243		—		116		386		513		394


(1)		Although Vale held a majority of the voting interest of investees accounted for under the equity method, existing veto rights held by noncontrolling shareholders under shareholder agreements preclude consolidation;

(2)		Investment includes goodwill of US$62 in December, 2009 and US$46 in December, 2008;

(3)		Acquired in March, 2009 (Note 5 (d));

(4)		Classified as avaiable-for-sale until investment was sold in April, 2009. Equity refers to dividends received;

(5)		See Note 5 (d).

Impairment of goodwill and long-lived assets

As described in note 3(g), we test goodwill and long-lived assets for impairment when events or changes in circumstances indicate that they might be impaired. For impairment test purposes goodwill is allocated to reporting units, and are tested at least annually.

No impairment charges were recognized in 2009 as a result of the annual goodwill impairment tests performed. In 2008, an impairment charge, related to nickel operations was recorded in operating results in the amount of US$950.

Management determined cash flows based on approved financial budgets. Gross margin projections were based on past performance and management’s expectations of market developments. Information about sales prices are consistent with the forecasts included in industry reports, considering quoted prices when available and when appropriate. The discount rates used reflect specific risks relating to the relevant assets in each reporting unit, depending on their composition and location.

Recognition of additional goodwill impairment charges in the future would depend on several estimates including market conditions, recent actual results and management’s forecasts. This information shall be obtained at the time when our assessment is to be updated. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

There were no goodwill movements in 2009, expect for the cumulative translation adjustments.

Short-term debt

Short-term borrowings outstanding on December 31, 2009 are from commercial banks for export financing denominated in US dollars, with average annual interest rates of 2.02%.

Long-term debt


	Current liabilities				Long-term liabilities
	2009		2008		2009		2008

Foreign debt
Loans and financing denominated in the following currencies:
US dollars		1,543		210		4,332		5,905
Others		29		23		411		167
Fixed Rate Notes — US dollar denominated		—		—		8,481		6,510
Debt securities — export sales (*) — US dollar denominated		150		55		—		149
Perpetual notes		—		—		78		83
Accrued charges		198		217		—		—

		1,920		505		13,302		12,814

Brazilian debt
Brazilian Reais indexed to Long-term Interest Rate - TJLP/CDI and General Price Index-Market (IGPM)		62		33		3,433		1,990
Basket of currencies		1		1		3		4
Non-convertible debentures		861		—		2,592		2,562
US dollars denominated		—		—		568		165
Accrued charges		89		94		—		—

		1,013		128		6,596		4,721

Total		2,933		633		19,898		17,535


(*)		Secured by receivables from future export sales. Redeemed in January, 2010.

The long-term portion at December 31, 2009 falls due as follows:


2011			2,623
2012			1,209
2013			3,250
2014			925
2015 and thereafter			11,518
No due date (Perpetual notes and non-convertible debentures)			373

			19,898

At December 31, 2009 annual interest rates on long-term debt were as follows:


Up to 3%			6,696
5.1% to 7%			8,148
7.1% to 9%			5,735
9.1% to 11%			978
Over 11% (*)			1,192
Variable (Perpetual notes)			82

			22,831

(*)

Includes non-convertible debentures and other Brazilian Real denominated debt that bear interest at the Brazilian Interbank Certificate of Deposit (CDI) and Brazilian Government Long-term Interest Rates (TJLP) plus a spread. For these operations we have entered into derivative transactions to mitigate our exposure to the floating rate debt denominated in Brazilian Real, totaling US$6,675 of which US$3,949 has original interest rate between 7.1% and 9% per year the remaining amount has original interest rate above 9% per year. The average cost after taking into account the derivative transactions is 4.47% per year.

Vale has non-convertible debentures at Brazilian Real denominated as follow:


	Quantity as of December 31, 2009						Balance
Non Convertible Debentures	Issued		Outstanding		Maturity	Interest	2009		2008

1st Series		150,000		150,000	November 20, 2010	101.75% CDI		869		651
2nd Series		400,000		400,000	November 20, 2013	100% CDI + 0.25%		2,318		1,736
Tranche ‘B’		5		5	No due date	6.5% p.a + IGP-DI		295		209

								3,482		2,596


Short-term portion								861		—
Long-term portion								2,592		2,562
Accrued charges								29		34

								3,482		2,596

The indexation indices/ rates applied to our debt were as follows (unaudited):


	Three-month period ended									Year ended of
	December			September			December			December, 31
	31, 2009			30, 2009			31, 2008			2009			2008

TJLP — Long-Term Interest Rate (effective rate)		1.5			1.6			1.5			6.2			6.3
IGP-M — General Price Index — Market		(0.1	)		(0.4	)		1.2			(1.7	)		9.8
Appreciation (devaluation) of Real against US dollar		2.1			9.8			(18.1	)		34.2			(24.2	)

In November, 2009, Vale issued US$1 billion of 30-year notes through its wholly-owned subsidiary Vale Overseas, fully and unconditionaly guaranteed by Vale. These notes will mature in November 2039 and will bear a coupon of 6,875% per year, payable semi-annually, at a price of 98,564% of the principal amount.

In September, 2009, Vale issued US$1 billion of 10-year notes through its wholly-owned subsidiary Vale Overseas, fully and unconditionaly guaranteed by Vale. These notes will mature in September 2019 and will bear a coupon of 5.625% per year, payable semi-annually, at a price of 99.232% of the principal amount.

In January 2008 we entered into a trade finance agreement with a Brazilian bank in the amount of US$1,147 with final maturity in 2018.

Credit Lines

In November, 2009, Vale has signed a US$300 export facility agreement, through its subsidiary PT International Nickel Indonesia Tbk (PTI), with Japanese financial institutions using credit insurance provided by Nippon Export and Investment Insurance — NEXI, to finance the construction of the Karebbe hydroelectric power plant on the Larona river, island of Sulawesi, Indonesia. Through December 31, 2009, PT International had drawn down US$150 this facility.

During 2008, we entered into agreements with Banco Nacional de Desenvolvimento Econômico e Social — BNDES, (the Brazilian National Development Bank) in the amount of US$4 billion and with Japanese financing agencies in the amount of US$5 billion, of which US$3 billion with Japan Bank for International Cooperation — JBIC and US$2 billion with Nippon Export and Investment Insurance — NEXI related to future lines of credit to finance mining, logistics and power generation projects as part of our investment program for 2008-2012. Through December 31, 2009, Vale had drawn down US$892 of the committed credit facility with BNDES.

Additionally, we have revolving credit lines available under which amounts can be drawn down and repaid at the option of the borrower. At December 31, 2009, the total amount available under revolving credit lines was US$1,900, of which US$1,150 was granted to Vale International and the balance to Vale Inco. As of December 31, 2009, neither Vale International nor Vale Inco had drawn any amounts under these facilities, but US$115 of letters of credit were issued and remained outstanding pursant Vale Inco’s facility.

Guarantee

In December 31, 2009, US$753 (December 31, 2008 — US$556) of the total aggregate outstanding debt were secured, being US$152 (December 31, 2008 — US$204) guaranteed by receivables from future export sales of CVRD Overseas Ltd., US$34 (December 31, 2008 — US$57) guaranteed by the Brazilian Federal Government and US$567 (December 31, 2008 — US$295) guaranteed by others receiables. The remaining outstanding debt in the amount of US$22,078 (December 31, 2008 — US$17,612) were unsecured.

Our principal covenants require us to maintain certain ratios, such as debt to EBITDA and interest coverage. We have not identified any events of default as of December 31, 2009.

Stockholders’ equity

Each holder of common and preferred class A stock is entitled to one vote for each share on all matters brought before stockholders’ meetings, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer permanent veto rights over certain matters.

Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income under Brazilian GAAP, once declared at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the Brazilian GAAP equity value per share.

In October 2009 the Board of Directors approved the payment of the second tranche of the minimum dividend, and an amount of additional dividends to be distributed, totaling US$ 1,500, corresponding to US$ 0.28775711 per common or preferred share in circulation.

In April 2009, we paid US$1,250 as a first installment of the dividend to stockholders. The distribution was made in the form of dividends.

In July 2008, we issued 80,079,223 common ADS, 176,847,543 common shares, 63,506,751 preferred ADS and 100,896,048 preferred shares through a Global equity offering. Our capital increased by US$11,666, upon subscription of preferred stock of US$4,146 corresponding to 164,402,799 shares and common stock of US$7,520 corresponding to 256,926,766 shares. In August, 2008, we issued an additional 24,660,419 preferred shares, representing an increase of US$628. After the closing of the operation, our capital stock increased by US$12,294 in 2008; the transaction costs of US$105 were recorded as a reduction of the additional paid-in capital account.

Vale Issued mandatory convertible notes, as follows:

Date

Value

Headings

Emission

Expiration

Gross

Net of charges

Coupon

Tranches Rio and Rio P

June/2007

June/2010

1,880

1,869

5.50

% p.a.

Tranches Vale and Vale P- 2012

July/2009

June/2012

942

934

6.75

% p.a.

The notes pay a coupon quarterly and are entitled to an additional remuneration equivalent to the cash distribution paid to ADS holders. These notes were classified as a capital instrument, mainly due to the fact that neither the Company nor the holders have the option to settle the operation, whether fully or partially, with cash, and the conversion is mandatory; consequently, they were recognized as a specific component of shareholders’ equity, net of financial charges.

The funds linked to future mandatory conversion, net of charges are equivalent to the maximum of common shares and preferred shares, as follows. All the shares are currently held in treasury.


	Maximum amount of action				Value
Headings	Common		Preferred		Common		Preferred
Tranches Rio and Rio	P	56,582,040		30,295,456		1,296		584
Tranches Vale and Vale P- 2012		18,415,859		47,284,800		293		649

On October 30, 2009, we paid additional interest to holders of the mandatorily convertible notes of series RIO and of series RIO P, equal to the US dollar equivalent of R$0.857161 and R$1.017334 per notes, respectively, and to the holders of the mandatorily convertible notes of series VALE-2012 and VALE.P-2012, equal to the US dollar equivalent of R$1.236080 and R$1.429662 per notes, respectively.

In April 2009 we paid to holders of the mandatorily convertible notes of series RIO and of series RIO P, the US dollar equivalent of US$0.490922 and US$0.582658, respectively.

Brazilian law permits the payment of cash dividends only from retained earnings as stated in the BR GAAP statutory records and such payments are made in Brazilian Reais. Pursuant to the Company’s statutory books, undistributed retained earnings at December 31, 2009, total US$26,150, comprising the unrealized income and expansion reserves, which could be freely transferred to retained earnings and paid as dividends, if approved by the stockholders, after deducting of the minimum annual mandatory dividend.

No withholding tax is payable on distribution of profits earned except for distributions in the form of interest attributed to stockholders’ equity (Note 3 (p)).

Brazilian laws and our By-laws require that certain appropriations be made from retained earnings to reserve accounts on an annual basis, all determined in accordance with amounts stated in the statutory accounting records, as detailed below:


	Three-month period ended (unaudited)
	December			September		December			Year ended of December, 31
	31, 2009			30, 2009		31, 2008			2009			2008			2007
Undistributed retained earnings
Unrealized income reserve
Beginning of the period		60			55		67			45			73			57
Transfer from (to) retained earnings		(21	)		5		(22	)		(6	)		(28	)		16

End of the period		39			60		45			39			45			73
Expansion reserve
Beginning of the period		22,039			20,095		12,857			16,809			13,881			8,485
Transfer to capital stock		—			—		—			—			—			(3,776	)
Transfer from (to) retained earnings		4,072			1,944		3,952			9,302			2,928			9,172

End of the period		26,111			22,039		16,809			26,111			16,809			13,881
Legal reserve
Beginning of the period		1,903			1,734		1,212			1,448			1,310			970
Transfer to capital stock		—			—		—			—			—			(370	)
Transfer from (to) retained earnings		335			169		236			790			138			710

End of the period		2,238			1,903		1,448			2,238			1,448			1,310
Fiscal incentive investment reserve
Beginning of the period		51			46		47			38			53			43
Transfer to capital stock		—			—		—			—			—			(41	)
Transfer from (to) retained earnings		69			5		(9	)		82			(15	)		51

End of the period		120			51		38			120			38			53

Total undistributed retained earnings		28,508			24,053		18,340			28,508			18,340			15,317

The purpose and basis of appropriation to such reserves is described below:

Unrealized income reserve — this represents principally our share of the earnings of affiliates and joint ventures, not yet received in the form of cash dividends.

Expansion reserve — this is a general reserve for expansion of our activities.

Legal reserve — this reserve is a requirement for all Brazilian corporations and represents the appropriation of 5% of annual net income up to a limit of 20% of capital stock all determined under Brazilian GAAP.

Fiscal incentive investment reserve — this reserve results from an option to designate a portion of income tax otherwise payable for investment in government approved projects and is recorded in the year following that in which the taxable income was earned. As from 2000, this reserve basically contemplates income tax incentives (Note 6).

Basic and diluted earnings per share

Basic and diluted earnings per share amounts have been calculated as follows:


	Three-month period ended (unaudited)
	December			September			December			Year ended of December, 31
	31, 2009			30, 2009			31, 2008			2009			2008			2007
Net income attributable to Company’s stockholders		1,519			1,677			1,367			5,349			13,218			11,825


Interest attributed to preferred convertible notes		(19	)		(16	)		(15	)		(58	)		(46	)		(16	)
Interest attributed to common convertible notes		(23	)		(21	)		(32	)		(93	)		(96	)		(37	)

Net income for the period adjusted		1,477			1,640			1,320			5,198			13,076			11,772

Basic and diluted earnings per share

Income available to preferred stockholders		559			621			507			1,967			5,027			4,552
Income available to common stockholders		876			973			791			3,083			7,823			7,092
Income available to convertible notes linked to preferred shares		21			23			8			75			78			45
Income available to convertible notes linked to common shares		21			23			14			73			148			83
Weighted average number of shares outstanding (thousands of shares) — preferred shares		2,030,998			2,030,954			2,042,341			2,030,700			1,946,454			1,889,171
Weighted average number of shares outstanding (thousands of shares) — common shares		3,181,727			3,181,727			3,185,750			3,181,706			3,028,817			2,943,216
Treasury preferred shares linked to mandatorily convertible notes		77,580			77,580			30,295			77,580			30,295			18,478
Treasury common shares linked to mandatorily convertible notes		74,998			74,998			56,582			74,998			56,582			34,510

Total		5,365,303			5,365,259			5,314,968			5,364,984			5,062,148			4,885,375


Earnings per preferred share		0.28			0.31			0.25			0.97			2.58			2.41
Earnings per common share		0.28			0.31			0.25			0.97			2.58			2.41
Earnings per convertible notes linked to preferred share (*)		0.52			0.50			0.76			1.71			4.09			3.30
Earnings per convertible notes linked to common share (*)		0.59			0.59			0.81			2.21			4.29			3.51


(*)		Basic earnings per share only, as dilution assumes conversion

If the conversion of the convertible notes had been included in the calculation of diluted earnings per share they would have generated the following dilutive effect as shown below:


	Three-month period ended (unaudited)
	December		September		December		Year ended of December, 31
	31, 2009		30, 2009		31, 2008		2009		2008		2007

Income available to preferred stockholders		599		660		530		2,100		5,151		4,613
Income available to common stockholders		920		1,017		837		3,249		8,067		7,212
Weighted average number of shares outstanding (thousands of shares) — preferred shares		2,108,578		2,108,534		2,072,636		2,108,280		1,976,749		1,907,649
Weighted average number of shares outstanding (thousands of shares) — common shares		3,256,725		3,256,725		3,242,332		3,256,704		3,085,399		2,977,726
Earnings per preferred share		0.28		0.31		0.26		1.00		2.61		2.42
Earnings per common share		0.28		0.31		0.26		1.00		2.61		2.42

Pension plans

Since 1973 we sponsor a supplementary social security plan with characteristics of a defined benefit plan (the “Old Plan”) covering substantially all Brazilian employees, with benefits calculated based on years of service, age, contribution salary and supplementary social security benefits. This plan is administered by Fundação Vale do Rio Doce de Seguridade Social – VALIA and was funded by monthly contributions made by us and our employees, calculated based on periodic actuarial appraisals.

In May 2000, we implemented a new supplementary social security plan with characteristics of defined contribution, which complements the earnings of programmed retirements. The plan offers benefits to cover death, physical invalidity, and sickness, with defined benefit characteristics. Brazilian employees could opt to migrate to the “New Plan” (a Benefit Mix Plan – Vale Mais) which was taken up by over 98% of our employees. The Old Plan will continue in existence, covering almost exclusively retired participants and their beneficiaries.

Additionally we provide supplementary payments to a specific group of former Brazilian employees, in addition to the regular benefits from Valia. The plan provides postretirement health care, dental and pharmaceutical benefits.

Upon the acquisition of Inco, we assumed benefits through defined benefit pension plans that cover essentially all its employees and post retirement benefits other than pensions that also provide certain health care and life insurance benefits for retired employees.

The following information details the status of the defined benefit elements of all plans in accordance with employers’ disclosure about pensions and other post retirement benefits” and employers’ accounting for defined benefit pension and other postretirement plans”, as amended.

We use a measurement date of December 31 for our pension and post retirement benefit plans.

Change in benefit obligation


	As of December 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Benefit obligation at beginning of year		2,424			3,031			1,069			3,178			4,436			1,671
Service cost		11			43			17			11			60			25
Interest cost		313			249			88			309			245			85
Plan amendment		—			—			—			—			16			—
Benefits paid		(226	)		(279	)		(65	)		(283	)		(291	)		(70	)
Effect of exchange rate changes		843			555			187			(779	)		(775	)		(272	)
Actuarial loss (gain)		296			324			135			(12	)		(660	)		(370	)

Benefit obligation at end of year		3,661			3,923			1,431			2,424			3,031			1,069

Change in plan assets


	As of December 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Fair value of plan assets at beginning of year		3,043			2,507			9			4,187			3,762			10
Actual return on plan assets		1,121			402			1			57			(603	)		1
Employer contributions		40			155			65			41			272			70
Benefits paid		(226	)		(279	)		(65	)		(283	)		(291	)		(70	)
Effect of exchange rate changes		1,018			444			1			(959	)		(633	)		(2	)

Fair value of plan assets at end of year		4,996			3,229			11			3,043			2,507			9

Plan assets at December 31, 2009 include US$587 (US$188 at December 31, 2008) and US$69 (US$53 at December 31, 2008) of portfolio investments in our own shares and debentures, respectively, and US$64 (US$44 at December 31, 2008) of shares of related parties. They also include US$3,261 of Brazilian Federal Government securities (US$2,472 at December 31, 2008) and US$391 of Canada Federal Government securities (US$347 at December 31, 2008).

c) Funded Status and Financial Position


	As of December 31
	2009						2008
	Overfunded		Underfunded		Underfunded		Overfunded		Underfunded		Underfunded
	pension plans		pension plans		other benefits		pension plans		pension plans		other benefits
Other assets		1,335		—		—		619		—		3
Current liabilities		—		62		82		—		38		64
Non-current liabilities		—		632		1,338		—		486		999

Funded status		1,335		694		1,420		619		524		1,060

d) Assumptions used (nominal terms)


	Brazil
	As of December 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Discount rate		11.08	% p.a.		11.08	% p.a.		11.08	% p.a.		11.28	% p.a.		11.28	% p.a.		11.28	% p.a.
Expected return on plan assets		12.00	% p.a.		11.50	% p.a.		—			12.22	% p.a.		13.00	% p.a.		—
Rate of compensation increase — up to 47 years		7.64	% p.a.		7.64	% p.a.		—			7.12	% p.a.		—			—
Rate of compensation increase — over 47 years		4.50	% p.a.		4.50	% p.a.		—			4.00	% p.a.		—			—
Inflation		4.50	% p.a.		4.50	% p.a.		4.50	% p.a.		4.00	% p.a.		4.00	% p.a.		4.00	% p.a.
Health care cost trend rate		—			—			7.63	% p.a.		—			—			7.12	% p.a.

Foreign

As of December 31

2009

2008

Underfunded

pension plans

other benefits

pension plans

other benefits

Discount rate

6.21

% p.a.

6.20

% p.a.

5.58

% p.a.

7.32

% p.a.

Expected return on plan assets

7.00

% p.a.

6.23

% p.a.

6.99

% p.a.

7.35

% p.a.

Rate of compensation increase — up to 47 years

4.11

% p.a.

3.58

% p.a.

4.12

% p.a.

3.58

% p.a.

Rate of compensation increase — over 47 years

4.11

% p.a.

3.58

% p.a.

4.12

% p.a.

3.58

% p.a.

Inflation

2.00

% p.a.

2.00

% p.a.

2.00

% p.a.

2.00

% p.a.

Health care cost trend rate

—

6.04

% p.a.

—

6.19

% p.a.

Expected returns for all plans’ assets are generated within the framework of a long term macroeconomic scenario provided by Tendencias Consultoria and an ALM — Asset Liability Modelling study prepared by Mercer Consulting.

e) Pension costs


	Three-month period ended (unaudited)
	December 31, 2009
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		4			14			5
Interest cost on projected benefit obligation		117			93			32
Expected return on assets		(161	)		(68	)		—
Amortizations and (gain) / loss		5			4			(19	)
Net deferral		—			1			3

Net periodic pension cost (credit)		(35	)		44			21


	Three-month period ended (unaudited)
	September 30, 2009
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		3			11			4
Interest cost on projected benefit obligation		81			64			18
Expected return on assets		(112	)		(47	)		(1	)
Amortizations and (gain) / loss		4			—			—
Net deferral		—			4			(4	)

Net periodic pension cost (credit)		(24	)		32			17


	Three-month period ended (unaudited)
	December 31, 2008
	Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits
Service cost — benefits earned during the period		3			13			5
Interest cost on projected benefit obligation		86			53			21
Expected return on assets		(143	)		(57	)		(5	)
Amortizations and (gain) / loss		4			(2	)		6
Net deferral		(1	)		11			(2	)

Net periodic pension cost (credit)		(51	)		18			25


	Year ended of December, 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Service cost — benefits earned during the year		11			43			17			11			60			25
Interest cost on projected benefit obligation		313			255			88			309			245			85
Expected return on assets		(431	)		(202	)		(1	)		(515	)		(253	)		(5	)
Amortizations and (gain) / loss		14			3			(19	)		15			—			—
Net deferral		—			14			(14	)		(5	)		11			(2	)

Net periodic pension costm (credit)		(93	)		113			71			(185	)		63			103

f) Accumulated benefit obligation


	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Accumulated benefit obligation		3,645			3,826			1,431			2,415			2,955			1,069
Projected benefit obligation		3,661			3,923			1,431			2,424			3,031			1,069
Fair value of plan assets		(4,996	)		(3,229	)		(11	)		(3,043	)		(2,507	)		(9	)

g) Impact of 1% variation in assumed health care cost trend rate


	1% increase				1% decrease
	2009		2008		2009			2008
	Overfunded		Underfunded		Overfunded			Underfunded
	pension plans		pension plans		pension plans			pension plans
Accumulated postretirement benefit obligation (APBO)		199		134		(163	)		(110	)
Interest and service costs		18		18		(14	)		(14	)

h) Other Cumulative Comprehensive Income (Deficit)


	As of December 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Net transition (obligation) / asset		2			—			—			(16	)		—			—
Net actuarial (loss) / gain		79			(338	)		301			(240	)		(206	)		402
Effect of exchange rate changes		(91	)		(7	)		(4	)		(18	)		10			3
Deferred income tax		3			111			(94	)		94			83			(146	)

Amounts recognized in other cumulative comprehensive income (deficit)		(7	)		(234	)		203			(180	)		(113	)		259

i) Change in Other Cumulative Comprehensive Income (Deficit)


	As of December 31
	2009									2008
	Overfunded			Underfunded			Underfunded			Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits			pension plans			pension plans			other benefits
Net transition (obligation) / asset not yet recognized in NPPC at beginning of the year		(12	)		—			—			(31	)		—			—
Net actuarial (loss) / gain not yet recognized in NPPC at beginning of the year		(261	)		(196	)		406			94			(41	)		95
Deferred income tax at beginning of the year		93			83			(147	)		(21	)		14			(35	)

Effect of initial recognition of cumulative comprehensive Income (deficit)		(180	)		(113	)		259			42			(27	)		60
Amortization of net transition (obligation) / asset		14			—			—			15			—			—
Amortization of net actuarial (loss) / gain		—			5			(19	)		(6	)		—			—
Total net actuarial (loss) / gain arising during the year		340			(112	)		(142	)		(328	)		(165	)		307
Effect of exchange rate changes		(91	)		(42	)		52			(18	)		10			3
Deferred income tax		(90	)		28			53			115			69			(111	)

Total recognized in other cumulative comprehensive income (deficit)		(7	)		(234	)		203			(180	)		(113	)		259

j) Plan assets

Brazilian Plans

The Investment Policy Statements of pension plans sponsored for Brazilian employees are based on a long term macroeconomic scenario and expected returns built by Tendências Consultoria and an ALM – Asset Liability Modeling study prepared by Mercer Consulting. An Investment Policy Statement was established for each obligation by following results of this strategic asset allocation study (ALM) in 2009.

Plans asset allocations comply with pension funds local regulation issued by CMN — Conselho Monetário Nacional (Resolução CMN 3792/09). We are allowed to invest in six different asset classes, defined as Segments by the law, as follows: Fixed Income, Equity, Structured Investments (Alternative Investments and Infra-Structure Projects), International Investments, Real Estate and Loans to Participants.

The Investment Policy Statements are approved by the Board, the Executive Directors and two Investments Committees. The internal and external portfolio managers are allowed to exercise the investment discretion under the limitations imposed by the Board and the Investment Committees.

The pension fund has a risk management process with established policies that intend to identify measure and control all kind of risks faced by our plans, such as: market, liquidity, credit, operational, systemic and legal.

Foreign plans

The strategy for each of the pension plans sponsored by Vale Inco is based upon a combination of local practices and the specific characteristics of the pension plans in each country, including the structure of the liabilities, the risk versus reward trade-off between different asset classes and the liquidity required to meet benefit payments.

Overfunded pension plans

Brazilian Plans

The Defined Benefit Plan (the “Old Plan”) has the majority of its assets allocated in fixed income, mainly in Brazilian government bonds (like TIPS) and corporate long term inflation linked bonds with the objective to reduce the asset-liability volatility. The target is 55% of the total assets. This LDI (Liability Driven Investments) strategy, when considered together with Loans to Participants segment, aims to hedge plan’s liabilities against inflation risk and volatility. Other segments or asset classes have their targets, as follows: Equity — 28%; Structured Investments – 5%; International Investments – 2%; Real estate – 6% and Loans to Participants – 4%. Structured Investments segment has invested only in Private Equity Funds in an amount of US$87 and US$67 at the end of December 31, 2009 and 2008, respectively.

The Investment Policy has the objective to achieve the adequate diversification, current income and long term capital growth through the combination of all asset classes described above to fulfill its obligations with the adequate level of risk. This plan has an average nominal return of 21.3% p.a. in dollars terms in the last 10 years.

The Vale Mais Plan (the “New Plan”) has obligations with characteristics of defined benefit and defined contribution plans, as mentioned. The majority of its investments is in fixed income. It was also implemented a LDI (Liability Driven Investments) strategy to reduce asset-liability volatility of the defined benefits plan’s component by using inflation linked bonds (like TIPS). The target allocation is 60% in fixed income. Other segments or asset classes have their targets, as follows: Equity — 24%; Structured Investments – 2%; International Investments – 2%; Real estate – 3% and Loans to Participants – 10%. Structured Investments segment has invested only in Private Equity Funds in an amount of US$10 and US$5 at the end of December 31, 2009 and 2008, respectively.

The Defined Contribution Vale Mais component offers three options of asset classes mix that can be chosen by participants. The options are: Fixed Income – 100%; 80% Fixed Income and 20% Equities and 65% Fixed Income and 35% Equities. Equity option is an indexed- fund that has the Bovespa Index as a benchmark.

The Investment Policy Statement has the objective to achieve the adequate diversification, current income and long term capital growth through the combination of all asset classes described above to fulfill its obligations and targets with the adequate level of risk. This plan has an average nominal return of 20% p.a. in dollars terms in the last 10 years.

— Fair value measurements by category — Overfunded Plans


	As of December 31
	2009									2008
	Total			Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3
Asset by category
Cash and cash equivalents		1			1		—		—		1			1		—		—
Accounts Receivable		16			16		—		—		—			—		—		—
Equity securities — liquid		1,303			1,303		—		—		461			461		—		—
Equity securities — non-liquid		64			—		64		—		120			—		120		—
Debt securities — Corporate bonds		143			—		143		—		151			—		151		—
Debt securities — Financial Institutions		226			—		226		—		147			—		147		—
Debt securities — Government bonds		1,744			1,744		—		—		1,109			1,109		—		—
Investment funds — Fixed Income		2,037			2,037		—		—		1,361			1,361		—		—
Investment funds — Equity		577			577		—		—		220			220		—		—
Investment funds — Private Equity		97			—		—		97		71			—		—		71
Real estate		249			—		—		249		156			—		—		156
Loans to Participants		282			—		—		282		229			—		—		229

Total		6,739			5,678		433		628		4,026			3,152		418		456

Funds not related to risk plans		(1,743	)								(983	)
Fair value of plan assets at end of year		4,996									3,043

— Fair value measurements using significant unobservable inputs – Level 3


	As of December 31
	2009												2008
	Private												Private
	Equity						Loans to						Equity						Loans to
	Funds			Real State			Participants			Total			Funds			Real State			Participants			Total
Beginning of the year		72			156			229			457			77			183			198			458


Actual return on plan assets		30			21			42			93			5			24			34			63
Assets sold during the year		(57	)		(11	)		(112	)		(180	)		(17	)		(6	)		—			(23	)
Assets purchases, sales and settlemnts		28			29			45			102			25			—			45			70
Cumulative translations adjustment		24			54			78			156			(18	)		(45	)		(48	)		(111	)


End of the year		97			249			282			628			72			156			229			457

The return target for private equity assets in 2010 is 10.20%. The target allocation is 5%, ranging between 2% and 10%. These investments have a longer investment horizon and low liquidity that aim to profit from economic growth, especially in the infra-structure sector of the Brazilian economy. Usually non-liquid assets’ fair value is established considering: acquisition cost or book value. Some private equity funds maybe, alternatively, apply the following methodologies: discounted cash flows analysis or analysis based on multiples.

The return target for loans to participants in 2010 is 11,90%. The fair value pricing of these assets includes provisions for non-paid loans, according to the local pension fund regulation.

The return target for real estate assets in 2010 is 9,90%. Fair value for these assets is considered book value. The pension fund hires companies specialized in real estate valuation that do not act in the market as brokers. All valuation techniques follow the local regulation.

Underfunded pesion plans

Brazilian Obligation

This obligation has an exclusive allocation in fixed income. It was also used a LDI (Liability Driven Investments) strategy for this plan. Most of the resources were invested in long term government and corporate inflation linked bonds with the objective to minimize asset-liability volatility and reduce inflation risk.

The Investment Policy Statement has the objective to achieve the adequate diversification, current income and long term capital growth through the combination of all asset classes described above to fulfill its obligations with the adequate level of risk. This obligation has an average nominal return of 22.8% p.a. in dollars terms in the last 8 years.

Foreign plans

For all pension plans except PT Inco, this has resulted in a target asset allocation of 60% in equity investments and 40% in fixed income investments, with all securities being traded in the public markets. Fixed income investments are in domestic bonds for each plan’s market and involve a mixture of government and corporate bonds. Equity investments are primarily global in nature and involve a mixture of large, mid and small capitalization companies with a modest explicit investment in domestic equities for each plan. The Canadian plans also use a currency hedging strategy (each developed currency’s exposure is 50% hedged) due to the large exposure to foreign securities. For PT Inco, the target allocation is 20% equity investment and the remainder in fixed income, with the vast majority of these investments being made within the domestic market.

— Fair value measurements by category — Underfunded Pension Plans


	As of December 31
	2009							2008
	Total			Level 1		Level 2		Total			Level 1		Level 2
Asset by category
Cash and cash equivalents		33			12		21		36			14		22
Equity securities — liquid		1,347			1,347		—		—			—		—
Equity securities — non-liquid		—			—		—		836			836		—
Debt securities — Corporate bonds		12			—		12		—			—		—
Debt securities — Financial Institutions		19			—		19		10			1		9
Debt securities — Government bonds		445			50		395		13			—		13
Investment funds — Fixed Income		988			287		701		391			41		350
Investment funds — Equity		409			87		322		839			179		660
Investment funds — Private Equity		—			—		—		404			62		342

Total		3,253			1,783		1,470		2,529			1,133		1,396

Funds not realted to risk plans		(24	)						(22	)

Fair value of plan assets at end of year		3,229							2,507

Underfunded other benefits

— Fair value measurements by category – Other Benefits


	As of December 31
	2009				2008
	Total		Level 1		Total		Level 1
Asset by category
Cash		11		11		9		9


Total		11		11		9		9

k) Cash flows contributions

Employer contributions expected for 2010 are US$240.

l) Estimated future benefit payments

The benefit payments, which reflect future service, are expected to be made as follows:


	As of December 31, 2009
	Overfunded		Underfunded		Underfunded
	pension plans		pension plans		other benefits		Total
2010		277		311		82		670
2011		280		313		87		680
2012		282		311		91		684
2013		284		308		94		686
2014		285		302		97		684
2015 and thereafter		1,434		1,454		479		3,367

Long-term incentive compensation plan

Since 2008, a long-term incentive compensation plan, was implemented.

Under the terms of the plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonus to the plan. The allocation is applied to purchase preferred shares of Vale, through a predefined financial institution, at market conditions and with no benefit provided by Vale.

The shares purchased by each executive are unrestricted and may, at the participant’s discretion, be sold at any time. However, the shares must be held for a three-year period and the executive must be continually employed by Vale during that period. The participant then becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on the their market rates. The total shares linked to the plan at December 31, 2009 and 2008, is 1,809,117 and 711,005, respectively.

Additionally, as a long-term incentive certain eligible executives have the opportunity to receive at the end of the triennial cycle a certain number of shares at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders.

We account for the compensation cost provided to our executives under this long-term incentive compensation plan, following the requirements Accounting for Stock-Based Compensation. Liabilities are measured at each reporting date at fair value, based on market rates. Compensation costs incurred are recognized, over the defined three-year vesting period. At December 31, 2009 and 2008, we recognized a liability of US$72 and US$7, respectively, through the Statement of Income.

Commitments and contingencies

a) In connection with a tax-advantaged lease financing arrangement sponsored by the French Government, we provided certain guarantees on behalf of Vale Inco New Caledônia (VINC) pursuant to which we guaranteed payments due from VINC of up to a maximum amount of US$100 (“Maximum Amount”) in connection with an indemnity. We also provided an additional guarantee covering the payments due from VINC of (a) amounts exceeding the Maximum Amount in connection with the indemnity and (b) certain other amounts payable by VINC under a lease agreement covering certain assets.

During the second quarter two new bank guarantees totaling US$62 (€43) were established by us on behalf of VINC in favour of the South Province of New Caledonia in order to guarantee the performance of VINC with respect to certain environmental obligations in relation to the metallurgical plant and the Kwe West residue storage facility.

Sumic Nickel Netherlands B.V., a 21% stockholder of VINC, has a put option to sell to us 25%, 50%, or 100% of the shares they own of VINC. The put option can be exercised if the defined cost of the nickel-cobalt development project exceeds a value agreed between the shareholders at project rates and an agreement cannot be reached on how to proceed with the project.

We provided a guarantee covering certain termination payments due from VINC to the supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for the VINC project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA is a result of a default by VINC and the date on which an early termination of the ESA were to occur. If VINC defaults under the ESA prior to the anticipated start date for supply of electricity to the project, the termination payment, which currently is at its maximum, would be US$209 (€145). Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

In February 2009, we and our subsidiary, Vale Inco Newfoundland and Labrador Limited (“VINL”), entered into a fourth amendment to the Voisey’s Bay Development agreement with the Government of Newfoundland and Labrador, Canada, that permitted VINL to ship up to 55,000 metric tonnes of nickel concentrate from the Voisey’s Bay area mines. As part of the agreement, VINL agreed to provide the Government of Newfoundland and Labrador financial assurance in the form of letters of credit each in the amount of Canadian US$17 (CAD$16) for each shipment of nickel concentrate shipped out of the province from January 1, 2009 to August 31, 2009. The amount of this financial assurance is Canadian US$118 (CAD$112) based on seven shipments of nickel concentrate and as of December 31, 2009, US$65 (CAD$62) remains outstanding.

As at December 31, 2009, there was an additional US$154 of letters of credit issued and outstanding as US$47 in additional bank guarantees. These are associated with environmental reclamation and other operating associated items such as insurance, electricity commitments and import and export duties.

b) We and our subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the amounts recognized are sufficient to cover probable losses in connection with such actions.

The provision for contingencies and the related judicial deposits are composed as follows:


	2009				2008
	Provision for		Judicial		Provision for		Judicial
	contingencies		deposits		contingencies		deposits
Labor and social security claims		657		657		458		378
Civil claims		582		307		386		242
Tax — related actions		489		175		828		518
Others		35		4		13		3

		1,763		1,143		1,685		1,141

Labor and social security — related actions principally comprise claims by Brazilian employees and former employees for (i) payment of time spent traveling from their residences to the work-place, (ii) additional health and safety related payments and (iii) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

Civil — actions principally related to claims made against us by contractors in Brazil in connection with losses alleged to have been incurred by them as a result of various past Government economic plans during which full inflation indexation of contracts was not permitted, as well, as for accidents and land appropriation disputes.

Tax – tax-related actions principally comprise challenges initiated by us, on certain taxes on revenues and uncertain tax positions. We continue to vigorously pursue our interests in all the above actions but recognize that we probably will incur some losses in the final instance, for which we have made provisions.

Judicial deposits are made by us following the court requirements, in order to be entitled to either initiate or continue a legal action. These amounts are released to us, upon receipt of a final favorable outcome from the legal action; in the case of an unfavorable outcome, the deposits are transferred to the prevailing party.

Contingencies settled during the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and during the years ended December 31, 2009, 2008 and 2007, totaled US$58, US$22, US$90 and US$236, US$148 and US$331, respectively. Provisions recognized in the three-month periods ended December 31, 2009, September 30, 2009 and December 31, 2008 and during the years ended December 31, 2009, 2008 and 2007, totaled US$137, US$116, US$113 and US$294, US$213 and US$364, respectively, classified as other operating expenses.

In addition to the contingencies for which we have made provisions we are defendants in claims where in our opinion, and based on the advice of our legal counsel, the likelihood of loss is possible but not probable, in the total amount of US$4,190 at December 31, 2009, and for which no provision has been made (December 31, 2008 – US$2,476).

c) At the time of our privatization in 1997, the Company issued debentures to its then-existing stockholders, including the Brazilian Government. The terms of the debentures, were set to ensure that the pre-privatization stockholders, including the Brazilian Government would participate in possible future financial benefits that could be obtained from exploiting certain mineral resources.

A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one cent), whose value will be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.

The debentures holders has the right to receive premiums, paid semiannually, equivalent to a percentage of net revenues from specific mine resources as set forth in the indenture.

In September and April 2009 we paid remuneration on these debentures of US$4 and US$3, respectively. During the period we paid a total of US$7.

d) We are committed under a take-or-pay agreement to purchase approximately 30,425 thousand metric tons of bauxite from Mineração Rio do Norte S.A. — MRN at a formula driven price, calculated based on the current London Metal Exchange — LME quotation for aluminum. Based on a market price of US$28.71 per metric ton as of December 31, 2009, this arrangement represents the following total commitment per metric ton as of December 31, 2009:


2010			195
2011			166
2012			169
2013			172
2014			172

			874

e) Description of Leasing Arrangements

Part of our railroad operations include leased facilities. The 30-year lease, renewable for a further 30 years, expires in August, 2026 and is classified as an operating lease. At the end of the lease term, we are required to return the concession and the lease assets. In most cases, management expects that in the normal course of business, leases will be renewed.

The following is a schedule by year of future minimum rental payments required under the railroad operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2009.


Year ending of December, 31:

2010			80
2011			80
2012			80
2013			80
2014 thereafter			1,018

Total minimum payments required			1,338

The total expenses of operating leases for the years ended December 31, 2009, 2008 and 2007 was US$80, US$53 and US$62, respectively.

During 2008, we entered into operating lease agreements with our joint ventures Nibrasco, Itabrasco and Kobrasco, under wich we leased four pellet plants. The lease terms are from 5 to 30 years.

The following is a schedule by year of future minimum rental payments required under the pellet plants operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2009:


Year ending of December, 31:

2010			114
2011			114
2012			114
2013			114
2014 thereafter			1,313

Total			1,769

The total expenses of operationg leases for the years ended December 31, 2009 and 2008 was US$114 and US$49, respectively.

f) Assets retirement obligations

We use various judgments and assumptions when measuring our asset retirement obligations.

Changes in circumstances, law or technology may affect our estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain.

The changes in the provisions for asset retirement obligations are as follows:


	Three-month period ended (unaudited)									Year ended of December, 31
	December			September			December
	31, 2009			30, 2009			31, 2008			2009			2008			2007

Beginning of period		1,102			999			1,000			887			975			676
Accretion expense		31			23			50			75			164			84
Liabilities settled in the current period		(21	)		(7	)		(2	)		(46	)		(7	)		(15	)
Revisions in estimated cash flows		(14	)		—			(45	)		(23	)		(47	)		83
Cumulative translation adjustment		18			87			(116	)		223			(198	)		147

End of period		1,116			1,102			887			1,116			887			975


Current liabilities		89			27			48			89			48			64
Non-current liabilities		1,027			1,075			839			1,027			839			911

Total		1,116			1,102			887			1,116			887			975

Other expenses

The line “Other operating expenses” totaled US$1,522 in 2009 (US$1,254 in 2008). The expenses of approximately US$880 related to idle capacity and stoppage of operations during the downturn period in the economy is the most significant item recorded in 2009.

Fair value disclosure of financial assets and liabilities

The Financial Accounting Standards Board, through Accounting Standards Codification and Accounting Standards Updates, define fair value, set out a framework for measuring fair value, which refers to valuation concepts and practices and require certain disclosures about fair value measurements.

a) Measurements

The pronouncements define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Under this standard, those inputs used to measure the fair value are required to be classified on three levels. Based on the characteristics of the inputs used in valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed as follows:

Level 1 — Unadjusted quoted prices on an active, liquid and visible market for identical assets or liabilities that are accessible at the measurement date;

Level 2 — Quoted prices for identical or similar assets or liabilities on active markets, inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability;

Level 3 — Assets and liabilities, which quoted prices, do not exist, or those prices or valuation techniques are supported by little or no market activity, unobservable or illiquid. At this point fair market valuation becomes highly subjective.

b) Measurements on a recurring basis

The description of the valuation methodologies used for recurring assets and liabilities measured at fair value in the Company’s Consolidated Balance Sheet at December 31, 2009 and 2008 are summarized below:

	•		Available-for-sale securities

			They are securities that are not classified either as held-for-trading or as held-to-maturity for strategic reasons and have readily available market prices. We evaluate the carrying value of some of our investments in relation to publicly quoted market prices when available. When there is no market value, we use inputs other than quoted prices.

	•		Derivatives

			The market approach is used for the swaps to estimate the fair value discounting their cash flows using the interest rate of the currency they are denominated. Also for the commodities contracts, since the fair value is computed by using forward curves for each commodities.

	•		Other Financial Liabilities

			Comprise stockholder’s debentures, which have their fair value measured by the market approach method, and their reference price is available on the secondary market.

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as follows:


	As of December 31, 2009
	Carry amount			Fair value			Level 1		Level 2
Available-for-sale securities		17			17			17		—
Unrealized gain on derivatives		832			832			—		832
Other financial liabilities		(750	)		(750	)		—		(750	)


	As of December 31, 2008
	Carry amount			Fair value			Level 1		Level 2
Available-for-sale securities		639			639			196		443
Unrealized losses on derivatives		(539	)		(539	)		—		(539	)
Other financial liabilities		(380	)		(380	)		—		(380	)

c) Measurements on a non-recurring basis

The Company also has assets under certain conditions that are subject to measurement at fair value on a non-recurring basis. These assets include goodwill and intangible assets. During the year ended December 31, 2009 we have not recognized any additional impairment loss for those items.

d) Financial Instruments

Long-term debt

The valuation method used to estimate the fair value of our debt is the market approach for the contracts that are quoted on the secondary market, such as bonds and debentures. The fair value of both fixed and floating rate debt is determined by discounting future cash flows of Libor and Vale’s bonds curves (income approach).

Time deposits

The method used is the income approach, through the prices available on the active market. The fair value is close to the carrying amount due to the short-term maturities of the instruments.

Our long-term debt is reported at amortized cost, and the income of time deposits is accrued monthly according to the contract rate, however its estimated fair value measurement is disclosed as follows:


	As of December 31, 2009
	Carry amount			Fair value			Level 1			Level 2
Time deposits		3,747			3,747			—			3,747
Long-term debt (less interests) (*)		(22,544	)		(23,344	)		(12,424	)		(10,920	)


(*)		Less accrued charges US$287


	As of December 31, 2008
	Carry amount			Fair value			Level 1			Level 2
Time deposits		2,308			2,308			—			2,308
Long-term debt (less interests) (*)		(17,857	)		(16,635	)		(7,833	)		(8,802	)


(*)		Less accrued charges US$311

Segment and geographical information

We adopt disclosures about segments of an enterprise and related information with respect to the information we present about our operating segments. The standard introduced a “management approach” concept for reporting segment information, whereby such information is required to be reported on the basis that the chief decision-maker uses internally for evaluating segment performance and deciding how to allocate resources to segments. We analyze our segment information on an aggregated and disaggregated basis as follows:

Ferrous products — comprises iron ore mining and pellet production, as well as our Brazilian Northern and Southern transportation systems, including railroads, ports and terminals, as they pertain to mining operations. Manganese mining and ferroalloys are also included in this segment.

Non-ferrous — comprises the production of non-ferrous minerals, including nickel (co-products and by-products), potash, kaolin, copper and aluminum — comprises aluminum trading activities, alumina refining and aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining.

Logistics — comprises our transportation systems as they pertain to the operation of our ships, ports and railroads for third-party cargos.

Others — comprises our investments in joint ventures and affiliates engaged in other businesses.

Information presented to senior management with respect to the performance of each segment is generally derived directly from the accounting records maintained in accordance with accounting practices adopted in Brazil together with certain minor inter-segment allocations.

Consolidated net income and principal assets are reconciled as follows:

Results by segment — before eliminations (aggregated)


	Three-month period ended (unaudited)
	December 31, 2009																		September 30, 2009																		December 31, 2008
				*() Non**																		*() Non**																		*() Non**
	Ferrous			ferrous			Logistic			Others			Elimination			Consolidated			Ferrous			ferrous			Logistic			Others			Elimination			Consolidated			Ferrous			ferrous			Logistic			Others			Elimination			Consolidated
RESULTS
Gross revenues — Foreign		6,041			2,202			32			172			(3,080	)		5,367			6,531			2,211			19			121			(3,057	)		5,825			7,540			2,417			6			212			(3,848	)		6,327
Gross revenues — Domestic		611			294			305			212			(248	)		1,174			572			331			317			74			(226	)		1,068			685			250			303			53			(176	)		1,115
Cost and expenses		(4,781	)		(2,171	)		(280	)		(439	)		3,328			(4,343	)		(4,480	)		(2,034	)		(218	)		(199	)		3,283			(3,648	)		(5,764	)		(2,444	)		(217	)		(165	)		4,024			(4,566	)
Research and development		(62	)		(66	)		(17	)		(151	)		—			(296	)		(37	)		(52	)		(13	)		(129	)		—			(231	)		(107	)		(112	)		(17	)		(59	)		—			(295	)
Depreciation, depletion and amortization		(362	)		(364	)		(40	)		(33	)		—			(799	)		(321	)		(354	)		(33	)		(13	)		—			(721	)		(171	)		(356	)		(26	)		(15	)		—			(568	)
Impairment of goodwill		—			—			—			—			—			—			—			—			—			—			—			—			—			(950	)		—			—			—			(950	)

Operating income		1,447			(105	)		—			(239	)		—			1,103			2,265			102			72			(146	)		—			2,293			2,183			(1,195	)		49			26			—			1,063
Financial income		599			(511	)		—			707			(730	)		65			579			189			6			—			(676	)		98			883			164			3			1			(804	)		247
Financial expenses		(877	)		313			(10	)		(704	)		730			(548	)		(757	)		(332	)		(7	)		(10	)		676			(430	)		(825	)		(327	)		(10	)		(41	)		804			(399	)
Gains (losses) on derivatives, net		311			(15	)		—			—			—			296			363			(22	)		—			—			—			341			(635	)		49			—			—			—			(586	)
Foreign exchange and monetary gains (losses), net		(21	)		40			1			(3	)		—			17			(43	)		158			(2	)		6			—			119			35			(181	)		12			(107	)		—			(241	)
Gain on sale of investments		(70	)		(120	)		—			—			—			(190	)		—			12			—			61			—			73			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		38			(32	)		65			—			—			71			88			10			33			24			—			155			80			(16	)		93			(32	)		—			125
Income taxes		418			325			3			10			—			756			(955	)		21			—			8			—			(926	)		968			215			4			(2	)		—			1,185
Noncontrolling interests		(21	)		(49	)		—			19			—			(51	)		16			(49	)		—			(13	)		—			(46	)		(6	)		(26	)		—			5			—			(27	)

Net income attributable to the Company’s stockholders		1,824			(154	)		59			(210	)		—			1,519			1,556			89			102			(70	)		—			1,677			2,683			(1,317	)		151			(150	)		—			1,367


Sales classified by geographic destination:
Foreign market
America, except United States		101			315			4			43			(156	)		307			209			343			—			—			(207	)		345			335			464			—			—			(271	)		528
United States		—			158			—			11			(8	)		161			5			249			—			11			(12	)		253			44			367			—			9			(70	)		350
Europe		1,681			688			—			29			(1,063	)		1,335			1,882			826			—			2			(1,488	)		1,222			2,715			817			(2	)		—			(1,639	)		1,891
Middle East/Africa/Oceania		301			70			—			17			(216	)		172			189			38			—			2			(109	)		120			543			65			—			54			(304	)		358
Japan		904			373			—			37			(438	)		876			597			283			—			52			(258	)		674			1,609			372			—			74			(703	)		1,352
China		2,717			210			28			17			(984	)		1,988			3,085			202			19			29			(761	)		2,574			1,240			127			8			—			(420	)		955
Asia, other than Japan and China		337			388			—			18			(215	)		528			564			270			—			25			(222	)		637			1,054			205			—			75			(441	)		893

		6,041			2,202			32			172			(3,080	)		5,367			6,531			2,211			19			121			(3,057	)		5,825			7,540			2,417			6			212			(3,848	)		6,327
Domestic market		611			294			305			212			(248	)		1,174			572			331			317			74			(226	)		1,068			685			250			303			53			(176	)		1,115

		6,652			2,496			337			384			(3,328	)		6,541			7,103			2,542			336			195			(3,283	)		6,893			8,225			2,667			309			265			(4,024	)		7,442


(*)		Other than Aluminum.

Operating segment — after eliminations (disaggregated)


	As of and for the three-month period ended (unaudited)
	December 31, 2009
																								Property,		Addition to
																								plant and		property,
																		Depreciation,						equipment,		plant and
																		depletion						net and		equipment
	Revenue						Value			Net		Cost and						and			Operation			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments
Ferrous
Iron ore		3,073		386		3,459		(67	)		3,392		(1,665	)		1,727			(334	)		1,393			21,736		1,405		74
Pellets		327		156		483		(29	)		454		(417	)		37			(20	)		17			947		—		1,037
Manganese		50		14		64		(1	)		63		(40	)		23			(2	)		21			25		1		—
Ferroalloys		55		68		123		(16	)		107		(69	)		38			(6	)		32			261		56		—
Pig iron		26		—		26		—			26		(42	)		(16	)		—			(16	)		144		—		—

		3,531		624		4,155		(113	)		4,042		(2,233	)		1,809			(362	)		1,447			23,113		1,462		1,111

Non ferrous
Nickel and other products (*)		871		1		872		—			872		(776	)		96			(264	)		(168	)		24,206		393		30
Potash		—		109		109		(8	)		101		(70	)		31			(10	)		21			159		—		—
Kaolin		40		8		48		(3	)		45		(41	)		4			(6	)		(2	)		190		2		—
Copper concentrate		204		3		207		(1	)		206		(129	)		77			(18	)		59			4,127		92		—
Aluminum Products		565		46		611		(9	)		602		(551	)		51			(66	)		(15	)		4,663		27		143

		1,680		167		1,847		(21	)		1,826		(1,567	)		259			(364	)		(105	)		33,345		514		173

Logistics
Railroads		—		218		218		(41	)		177		(155	)		22			(29	)		(7	)		1,979		26		468
Ports		—		87		87		(13	)		74		(49	)		25			(11	)		14			1,441		—		—
Ships		2		—		2		—			2		(9	)		(7	)		—			(7	)		1,104		300		125

		2		305		307		(54	)		253		(213	)		40			(40	)		—			4,524		326		593
Others		154		78		232		(20	)		212		(418	)		(206	)		(33	)		(239	)		7,828		453		2,708

		5,367		1,174		6,541		(208	)		6,333		(4,431	)		1,902			(799	)		1,103			68,810		2,755		4,585


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the three-month period ended (unaudited)
	September 30, 2009
																								Property,		Addition to
																								plant and		property,
																		Depreciation,						equipment,		plant and
																		depletion						net and		equipment
	Revenue						Value			Net		Cost and						and			Operation			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments

Ferrous
Iron ore		3,499		322		3,821		(43	)		3,778		(1,280	)		2,498			(285	)		2,213			20,563		623		70
Pellets		335		82		417		(34	)		383		(316	)		67			(27	)		40			947		—		1,130
Manganese		16		7		23		—			23		(22	)		1			(3	)		(2	)		23		1		—
Ferroalloys		46		55		101		(14	)		87		(67	)		20			(5	)		15			257		21		—
Pig iron		8		—		8		—			8		(8	)		—			—			—			144		—		—

		3,904		466		4,370		(91	)		4,279		(1,693	)		2,586			(320	)		2,266			21,934		645		1,200

Non ferrous
Nickel and other products (*)		1,100		3		1,103		—			1,103		(799	)		304			(256	)		48			23,805		367		43
Potash		—		118		118		(4	)		114		(52	)		62			(9	)		53			159		—		—
Kaolin		36		8		44		(2	)		42		(35	)		7			(9	)		(2	)		197		24		—
Copper concentrate		153		45		198		(13	)		185		(122	)		63			(20	)		43			4,013		92		—
Auminum products		482		47		529		(11	)		518		(498	)		20			(61	)		(41	)		4,655		17		171

		1,771		221		1,992		(30	)		1,962		(1,506	)		456			(355	)		101			32,829		500		214

Logistics
Railroads		—		239		239		(36	)		203		(123	)		80			(25	)		55			1,923		29		445
Ports		—		78		78		(11	)		67		(42	)		25			(8	)		17			1,441		—		—
Ships		—		—		—		—			—		—			—			—			—			807		171		123
		—		317		317		(47	)		270		(165	)		105			(33	)		72			4,171		200		568

Others		150		64		214		(19	)		195		(328	)		(133	)		(13	)		(146	)		6,598		300		2,601

		5,825		1,068		6,893		(187	)		6,706		(3,692	)		3,014			(721	)		2,293			65,532		1,645		4,583


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the three-month period ended (unaudited)
	December 31, 2008
																											Property,		Addition to
																											plant and		property,
																											equipment,		plant and
																		Depreciation,									net and		equipment
	Revenue						Value added			Net		Cost and						depletion and			Impairment			Operation			intangible		and
	Foreign		Domestic		Total		tax			revenues		expenses			Net			amortization			of goodwill			income			assets		intangible		Investments

Ferrous
Iron ore		3,105		431		3,536		(64	)		3,472		(1,497	)		1,975			(147	)		—			1,828			14,595		1,360		47
Pellets		914		114		1,028		(25	)		1,003		(522	)		481			(19	)		—			462			645		76		708
Manganese		19		5		24		(4	)		20		(17	)		3			—			—			3			18		1		—
Ferroalloys		92		83		175		(21	)		154		(69	)		85			(3	)		—			82			166		18		—
Pig iron		—		—		—		—			—		—			—			—			—			—			144		116		—

		4,130		633		4,763		(114	)		4,649		(2,105	)		2,544			(169	)		—			2,375			15,568		1,571		755

Non ferrous
Nickel and other products (*)		1,111		7		1,118		—			1,118		(1,298	)		(180	)		(295	)		(950	)		(1,425	)		21,729		1,233		53
Potash		—		23		23		(2	)		21		(15	)		6			(1	)		—			5			159		35		—
Kaolin		35		10		45		(2	)		43		(40	)		3			(5	)		—			(2	)		199		2		—
Copper concentrate		73		30		103		(6	)		97		(285	)		(188	)		(17	)		—			(205	)		3,543		89		—
Aluminum products		713		66		779		(3	)		776		(543	)		233			(38	)		—			195			3,831		115		140

		1,932		136		2,068		(13	)		2,055		(2,181	)		(126	)		(356	)		(950	)		(1,432	)		29,461		1,474		193

Logistics
Railroads		—		240		240		(40	)		200		(152	)		48			(22	)		—			26			1,431		10		326
Ports		—		70		70		(10	)		60		(41	)		19			(4	)		—			15			1,441		113		—
Ships		—		—		—		—			—		—			—			—			—			—			374		342		94

		—		310		310		(50	)		260		(193	)		67			(26	)		—			41			3,246		465		420
Others		265		36		301		(10	)		291		(195	)		96			(17	)		—			79			1,054		179		1,040

		6,327		1,115		7,442		(187	)		7,255		(4,674	)		2,581			(568	)		(950	)		1,063			49,329		3,689		2,408


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Results by segment — before eliminations (aggregated)


	Year ended of December, 31
	2009																		2008																		2007
				*() Non**																		*() Non**																		*() Non**
	Ferrous			ferrous			Logistic			Others			Elimination			Consolidated			Ferrous			ferrous			Logistic			Others			Elimination			Consolidated			Ferrous			ferrous			Logistic			Others			Elimination			Consolidated
RESULTS
Gross revenues — Foreign		23,656			8,151			67			562			(12,152	)		20,284			33,369			13,668			51			588			(15,842	)		31,834			21,126			16,844			61			242			(10,437	)		27,836
Gross revenues — Domestic		1,779			1,148			1,101			389			(762	)		3,655			4,342			1,341			1,640			234			(882	)		6,675			3,865			1,238			1,519			1			(1,344	)		5,279
Cost and expenses		(17,374	)		(7,927	)		(876	)		(916	)		12,914			(14,179	)		(24,143	)		(9,786	)		(1,097	)		(617	)		16,724			(18,919	)		(16,882	)		(10,608	)		(983	)		(310	)		11,781			(17,002	)
Research and development		(192	)		(253	)		(57	)		(479	)		—			(981	)		(338	)		(380	)		(101	)		(266	)		—			(1,085	)		(175	)		(329	)		(39	)		(190	)		—			(733	)
Depreciation, depletion and amortization		(1,144	)		(1,385	)		(126	)		(67	)		—			(2,722	)		(1,021	)		(1,623	)		(128	)		(35	)		—			(2,807	)		(917	)		(1,149	)		(103	)		(17	)		—			(2,186	)
Impairment of goodwill		—			—			—			—			—			—			—			(950	)		—			—			—			(950	)		—			—			—			—			—			—

Operating income		6,725			(266	)		109			(511	)		—			6,057			12,209			2,270			365			(96	)		—			14,748			7,017			5,996			455			(274	)		—			13,194
Financial income		2,439			12			8			711			(2,789	)		381			3,048			798			10			1			(3,255	)		602			2,514			595			9			25			(2,848	)		295
Financial expenses		(2,941	)		(653	)		(17	)		(736	)		2,789			(1,558	)		(3,479	)		(1,490	)		(15	)		(36	)		3,255			(1,765	)		(4,008	)		(1,318	)		(17	)		(14	)		2,848			(2,509	)
Gains (losses) on derivatives, net		1,647			(119	)		—			—			—			1,528			(719	)		(93	)		—			—			—			(812	)		854			63			—			—			—			917
Foreign exchange and monetary gains (losses), net		173			445			(11	)		68			—			675			767			(265	)		(32	)		(106	)		—			364			2,302			274			(15	)		(2	)		—			2,559
Gain on sale of investments		87			(108	)		—			61			—			40			—			80			—			—			—			80			—			81			237			459			—			777
change in provision for losses on equity investments		270			(10	)		142			31			—			433			543			24			133			94			—			794			301			93			125			76			—			595
Income taxes		(2,618	)		525			(11	)		4			—			(2,100	)		130			(697	)		23			9			—			(535	)		(1,959	)		(1,236	)		(16	)		10			—			(3,201	)
Minority interests		17			(121	)		—			(3	)		—			(107	)		(8	)		(256	)		—			6			—			(258	)		(31	)		(770	)		(1	)		—			—			(802	)

Net income attributable to the Company’s stockholders		5,799			(295	)		220			(375	)		—			5,349			12,491			371			484			(128	)		—			13,218			6,990			3,778			777			280			—			11,825


Sales classified by geographic destination:
Foreign market
America, except United States		419			1,368			4			57			(596	)		1,252			1,805			2,215			1			—			(1,201	)		2,820			1,449			2,405			23			—			(1,026	)		2,851
United States		29			824			—			41			(62	)		832			648			2,201			1			9			(392	)		2,467			432			2,770			—			81			(318	)		2,965
Europe		6,101			2,618			—			43			(4,726	)		4,036			11,215			4,132			26			9			(5,933	)		9,449			6,823			4,195			33			—			(3,716	)		7,335
Middle East/Africa/Oceania		972			233			—			33			(707	)		531			1,904			394			—			154			(952	)		1,500			827			538			—			161			(412	)		1,114
Japan		2,356			972			—			200			(1,116	)		2,412			4,516			1,893			1			245			(1,918	)		4,737			2,131			2,625			—			—			(929	)		3,827
China		12,019			878			63			65			(4,022	)		9,003			9,743			887			21			4			(3,949	)		6,706			7,570			1,457			4			—			(3,168	)		5,863
Asia, other than Japan and China		1,760			1,258			—			123			(923	)		2,218			3,538			1,946			1			167			(1,497	)		4,155			1,894			2,854			1			—			(868	)		3,881

		23,656			8,151			67			562			(12,152	)		20,284			33,369			13,668			51			588			(15,842	)		31,834			21,126			16,844			61			242			(10,437	)		27,836
Domestic market		1,779			1,148			1,101			389			(762	)		3,655			4,342			1,341			1,640			234			(882	)		6,675			3,865			1,238			1,519			1			(1,344	)		5,279

		25,435			9,299			1,168			951			(12,914	)		23,939			37,711			15,009			1,691			822			(16,724	)		38,509			24,991			18,082			1,580			243			(11,781	)		33,115

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2009
																								Property,		Addition to
																								plant and		property,
																		Depreciation,						equipment,		plant and
																		depletion						net and		equipment
	Revenue						Value added			Net		Cost and						and			Operation			intangible		and
	Foreign		Domestic		Total		tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments
Ferrous
Iron ore		11,797		1,034		12,831		(172	)		12,659		(4,957	)		7,702			(1,043	)		6,659			21,736		3,361		74
Pellets		1,015		337		1,352		(92	)		1,260		(1,165	)		95			(76	)		19			947		84		1,037
Manganese		118		27		145		(2	)		143		(103	)		40			(9	)		31			25		4		—
Ferroalloys		190		182		372		(45	)		327		(278	)		49			(15	)		34			261		112		—
Pig iron		45		—		45		—			45		(63	)		(18	)		—			(18	)		144		48		—

		13,165		1,580		14,745		(311	)		14,434		(6,566	)		7,868			(1,143	)		6,725			23,113		3,609		1,111

Non ferrous
Nickel and other products (*)		3,937		10		3,947		—			3,947		(3,292	)		655			(1,016	)		(361	)		24,206		1,464		30
Potash		—		413		413		(17	)		396		(187	)		209			(29	)		180			159		—		—
Kaolin		138		35		173		(9	)		164		(146	)		18			(34	)		(16	)		190		53		—
Copper concentrate		597		85		682		(19	)		663		(462	)		201			(72	)		129			4,127		558		—
Aluminum products		1,869		181		2,050		(37	)		2,013		(1,969	)		44			(235	)		(191	)		4,663		143		143

		6,541		724		7,265		(82	)		7,183		(6,056	)		1,127			(1,386	)		(259	)		33,345		2,218		173

Logistics
Railroads		—		838		838		(137	)		701		(539	)		162			(97	)		65			1,979		96		468
Ports		—		264		264		(38	)		226		(161	)		65			(29	)		36			1,441		106		—
Ships		2		—		2		—			2		(9	)		(7	)		—			(7	)		1,104		738		125

		2		1,102		1,104		(175	)		929		(709	)		220			(126	)		94			4,524		940		593
Others		576		249		825		(60	)		765		(1,201	)		(436	)		(67	)		(503	)		7,828		1,329		2,708

		20,284		3,655		23,939		(628	)		23,311		(14,532	)		8,779			(2,722	)		6,057			68,810		8,096		4,585


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2008
																											Property,		Addition to
																											plant and		property,
																											equipment,		plant and
																		Depreciation,									net and		equipment
	Revenue						Value added			Net		Cost and						depletion and			Impairment			Operation			intangible		and
	Foreign		Domestic		Total		tax			revenues		expenses			Net			amortization			of goodwill			income			assets		intangible		Investments
Ferrous
Iron ore		15,102		2,673		17,775		(364	)		17,411		(6,547	)		10,864			(876	)		—			9,988			14,595		3,645		47
Pellets		3,481		820		4,301		(189	)		4,112		(2,394	)		1,718			(112	)		—			1,606			645		127		708
Manganese		221		45		266		(15	)		251		(77	)		174			(5	)		—			169			18		3		—
Ferroalloys		704		507		1,211		(128	)		1,083		(457	)		626			(22	)		—			604			166		32		—
Pig iron		146		—		146		—			146		(67	)		79			(3	)		—			76			144		122		—

		19,654		4,045		23,699		(696	)		23,003		(9,542	)		13,461			(1,018	)		—			12,443			15,568		3,929		755

Non ferrous
Nickel and other products (*)		7,785		44		7,829		—			7,829		(4,425	)		3,404			(1,323	)		(950	)		1,131			21,729		2,813		53
Potash		—		295		295		(16	)		279		(120	)		159			(19	)		—			140			159		43		—
Kaolin		167		42		209		(9	)		200		(213	)		(13	)		(32	)		—			(45	)		199		6		—
Copper concentrate		787		106		893		(22	)		871		(683	)		188			(77	)		—			111			3,543		283		—
Aluminum products		2,681		361		3,042		(66	)		2,976		(2,288	)		688			(172	)		—			516			3,831		440		140

		11,420		848		12,268		(113	)		12,155		(7,729	)		4,426			(1,623	)		(950	)		1,853			29,461		3,585		193

Logistics
Railroads		—		1,303		1,303		(205	)		1,098		(749	)		349			(103	)		—			246			1,431		121		326
Ports		11		293		304		(39	)		265		(198	)		67			(26	)		—			41			1,441		242		—
Ships		—		—		—		—			—		—			—			—			—			—			374		343		94

		11		1,596		1,607		(244	)		1,363		(947	)		416			(129	)		—			287			3,246		706		420
Others		749		186		935		(30	)		905		(703	)		202			(37	)		—			165			1,054		752		1,040

		31,834		6,675		38,509		(1,083	)		37,426		(18,921	)		18,505			(2,807	)		(950	)		14,748			49,329		8,972		2,408


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Operating segment — after eliminations (disaggregated)


	As of and for the year ended December 31,
	2007
																								Property,		Addition to
																								plant and		property,
																								equipment,		plant and
																		Depreciation,						net and		equipment
	Revenue						Value			Net		Cost and						depletion and			Operation			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments
Ferrous
Iron ore		9,873		2,035		11,908		(286	)		11,622		(4,520	)		7,102			(777	)		6,325			17,031		2,496		60
Pellets		2,151		587		2,738		(132	)		2,606		(1,860	)		746			(87	)		659			754		92		741
Manganese		48		21		69		(5	)		64		(66	)		(2	)		(7	)		(9	)		79		2		—
Ferroalloys		445		274		719		(70	)		649		(442	)		207			(25	)		182			168		22		—
Pig iron		81		—		81		—			81		(57	)		24			(5	)		19			198		34		—

		12,598		2,917		15,515		(493	)		15,022		(6,945	)		8,077			(901	)		7,176			18,230		2,646		801

Non ferrous
Nickel and other products (*)		11,664		125		11,789		—			11,789		(6,077	)		5,712			(927	)		4,785			23,668		2,088		299
Potash		—		178		178		(10	)		168		(108	)		60			(23	)		37			218		19		—
Kaolin		202		36		238		(9	)		229		(228	)		1			(33	)		(32	)		295		33		—
Copper concentrate		663		139		802		(30	)		772		(456	)		316			(64	)		252			1,841		197		—
Aluminum products		2,418		304		2,722		(66	)		2,656		(1,717	)		939			(111	)		828			4,448		856		184

		14,947		782		15,729		(115	)		15,614		(8,586	)		7,028			(1,158	)		5,870			30,470		3,193		483

Logistics
Railroads		—		1,220		1,220		(199	)		1,021		(636	)		385			(88	)		297			1,735		491		342
Ports		13		254		267		(46	)		221		(177	)		44			(22	)		22			1,371		102		—
Ships		17		21		38		(3	)		35		(44	)		(9	)		(3	)		(12	)		36		12		107

		30		1,495		1,525		(248	)		1,277		(857	)		420			(113	)		307			3,142		605		449
Others		261		85		346		(17	)		329		(474	)		(145	)		(14	)		(159	)		2,783		207		1,189

		27,836		5,279		33,115		(873	)		32,242		(16,862	)		15,380			(2,186	)		13,194			54,625		6,651		2,922


(*)		Includes nickel co-products and by-products (copper, precious metals, cobalt and others).

Related party transactions

Balances from transactions with major related parties are as follows:


	As of December 31
	2009				2008
	Assets		Liabilities		Assets		Liabilities

AFFILIATED COMPANIES AND JOINT VENTURES
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		34		34		7		34
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		1		6		37		64
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		—		22		29		71
Companhia Coreano—Brasileira de Pelotização — KOBRASCO		1		5		1		22
Baovale Mineração SA		2		22		2		20
Usinas Siderúrgicas de Minas Gerais SA — USIMINAS (*)		—		—		18		—
Minas da Serra Geral SA — MSG		—		26		—		13
MRS Logística SA		10		418		8		219
Mineração Rio Norte SA		—		25		8		38
Samarco Mineração SA		55		—		10		—
Teal Minerals Incorporated		84		—		—		—
Korea Nickel Corporation		11		—		38		—
Mitsui & CO, LTD		—		26		—		—
Others		24		29		32		24

		222		613		190		505

Current		186		496		190		414

Long-term		36		117		—		91


(*)		Sold in April 2009

These balances are included in the following balance sheet classifications:


	As of December 31
	2009				2008
	Assets		Liabilities		Assets		Liabilities

Current assets
Accounts receivable		79		—		137		—
Loans and advances to related parties		107		—		53		—
Non-current assets
Loans and advances to related parties		36		—		—		—
Current liabilities
Suppliers		—		463		—		302
Loans from related parties		—		33		—		112
Non-current liabilities
Long-term debt		—		117		—		91

		222		613		190		505

Income and expenses from the principal transactions and financial operations carried out with majorelated parties are as follows:


	Year ended of December, 31
	2009				2008				2007
	Income		Expense		Income		Expense		Income		Expense

AFFILIATED COMPANIES AND JOINT VENTURES
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		29		47		105		393		386		328
Samarco Mineração SA		97		—		259		—		117		—
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		—		18		240		163		233		163
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		85		75		342		378		247		195
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		—		29		101		234		220		270
Usinas Siderúrgicas de Minas Gerais SA — USIMINAS (*)		46		—		651		—		442		—
Mineração Rio Norte SA		—		210		—		249		—		232
MRS Logística SA		12		484		9		829		17		593
Others		19		29		34		34		30		29

		288		892		1,741		2,280		1,692		1,810


(*)		Sold in April 2009.

These amounts are included in the following statement of income line items:


	Year ended of December, 31
	2009				2008				2007
	Income		Expense		Income		Expense		Income		Expense

Sales / Cost of iron ore and pellets		233		193		1,698		1,369		1,649		960
Revenues / expense from logistic services		26		457		25		624		17		593
Sales / Cost of aluminum products		—		210		—		249		—		232
Financial income/expenses		29		32		18		38		26		24
Others		—		—		—		—		—		1

		288		892		1,741		2,280		1,692		1,810

Additionally we have loans payable to Banco Nacional de Desenvolvimento Social and BNDES Participações S.A in the amounts of US$1,691 and US$662 respectively, accruing interest at market rates, which fall due through 2029. The operations generated interest expenses of US$94. We also maintain cash equivalent balances with Banco Bradesco S.A. in the amount of US$53 it December 31, 2009. The effect of these operations in results was US$39.

Derivative financial instruments

Risk management policy

Vale’s risk management strategy encompasses an enterprise risk management approach where we evaluate not only market risk impacts on the business, but also the impacts arising from credit and operating risks.

An enterprise wide risk management approach is considered by us to be mandatory for Vale as traditional market risk measures, such as VaR (Value at Risk), are not sufficient to evaluate the group exposures since our main goal is to avoid a possible lack of cash to fulfill our future obligations and needs.

We also consider the correlations between different market risk factors when evaluating our exposures. By doing so, we are able to evaluate the net impact on our cash flows from all main market variables. Using this framework we also identified a natural diversification of products and currencies in our portfolio. This diversification benefit implies in a natural reduction of the overall risk of the Company. Additionally, we are constantly working to implement risk mitigation strategies that significantly contribute to reduce the volatility in our cash flows beyond the levels initially observed and to acceptable levels of risk.

Vale considers that the effective management of risk is a key objective to support its growth strategy and financial flexibility. The risk reduction on Vale’s future cash flows contributes to a better perception of the Company’s credit quality, improving its ability to access different markets. As a commitment to the risk management strategy, the Board of Directors has established an enterprise-wide risk management policy and a risk management committee.

The risk management policy determines that Vale should evaluate regularly its cash flow risks and potential risk mitigation strategies. Whenever considered necessary, mitigation strategies should be put in place to reduce cash flow volatility. The executive board is responsible for the evaluation and approval of long-term risk mitigation strategies recommended by the risk management committee.

The risk management committee assists our executive officers in overseeing and reviewing our enterprise risk management activities including the principles, policies, process, procedures and instruments employed to manage risk. The risk management committee reports periodically to the executive board on how risks have been monitored, what are the most important risks we are exposed to and their impact on cash flows.

The risk management policy and the risk management procedures, that complement the normative of risk management governance model, explicitly prohibit speculative transactions with derivatives and require the diversification of operations and counterparties.

Besides the risk management governance model, Vale has put in place a well defined corporate governance structure. The recommendation and execution of the derivative transactions are implemented by different and independent areas. It is the responsibility of the risk management department to define and propose to the risk management committee market risk mitigation strategies consistent with Vale’s and it’s wholly owned subsidiaries corporate strategy. It is the responsibility of the finance department the execution of the risk mitigation strategies through the use of derivatives. The independence of the areas guarantees an effective control on these operations.

The consolidated market risk exposure and the portfolio of derivatives are measured monthly and monitored in order to evaluate the financial results and market risk impacts on our cash flow, as well as to guarantee that the initial goals will be achieved. The mark-to-market of the derivatives portfolio is reported weekly to management.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed are:

•

Interest rates;

•

Foreign exchange;

•

Product prices and input costs

Foreign exchange and interest rate risk

Vale’s cash flows are exposed to volatility of several different currencies. While most of our product prices are indexed to the US dollars, most of our costs, disbursements and investments are indexed to currencies other than the US dollar, mainly the Brazilian Real and Canadian dollar.

Derivative instruments may be used to reduce Vale’s potential cash flow volatility arising from the currency mismatch between our debt and our revenues. Vale’s foreign exchange and interest rate derivative portfolio consists, basically, of interest rate swaps to convert floating cash flows in Brazilian Real to fixed or floating US dollar cash flows, without any leverage.

Vale is also exposed to interest rate risks on loans and financings. Our floating rate debt consists mainly of loans including export pre-payments, commercial banks and multilateral organizations loans. In general, our US dollars floating rate debt is subject to changes in the LIBOR (London Interbank Offer Rate in US dollars). To mitigate the impact of the interest rate volatility on its cash flows, Vale takes advantage of natural hedges resulting from the correlation of metal prices and US dollar floating rates. When natural hedges are not present, we may opt to look for the same effect by using financial instruments.

Our Brazilian Real denominated debt subject to floating interest rates are debentures, loans obtained from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and property and services acquisition financing in the Brazilian market. These debts are mainly linked to CDI and TJLP.

The swap transactions have similar settlement dates to the debt interest and principal payment dates, taking into account the liquidity restrictions of the market. At each settlement date, the results on the swap transactions partially offset the impact of the US dollar / Brazilian Real exchange rate in our obligations, contributing to a stable flow of cash disbursements in US dollars for interest and/or principal payment of our Brazilian Real denominated debt.

In the event of an appreciation (depreciation) of the Brazilian Real against the US dollar, the negative (positive) impact on our Brazilian Real denominated debt obligations (interest and/or principal payment) measured in US dollars will be partially offset by a positive (negative) effect from any existing swap transaction, regardless of the US dollar / Brazilian Real exchange rate on the payment date.

We have other exposures associated with our outstanding debt portfolio. In order to reduce cash flow volatility associated with a financing from KFW (Kreditanstalt Für Wiederaufbau) indexed to Euribor, Vale entered into a swap contract where the cash flows in Euros are converted into cash flows in US dollars.

In order to reduce the cash flows volatility associated with the foreign exchange exposure from coal fixed price sales, Vale purchased forward Australian dollars.

Product price risk

Vale is also exposed to several market risks associated with global commodities price volatilities.

Currently, our derivative transactions include nickel, aluminum, bunker oil and maritime freight (FFA) derivatives and all have the same purpose of mitigating Vale’s cash flow volatility.

Nickel — The Company has the following derivative instruments in this category:

•

Strategic derivative program — in order to protect our cash flows in 2009 and 2010, we entered into derivative transactions where we fixed the prices of some of our nickel sales during the period.

•

Fixed price sales program — we use to enter into nickel future contracts on the London Metal Exchange (LME) with the purpose of maintaining our exposure to nickel price variation, regarding the fact that, in some cases, the commodity is sold at a fixed price to some customers. This program was interrupted after the decision of the strategic derivative program.

•

Nickel purchase program — Vale has also sold nickel futures on the LME, in order to minimize the risk of mismatch between the pricing on the costs of intermediate products and finished goods.

Aluminum — in order to protect our cash flow in 2009 and 2010, we entered into derivatives transactions where we fixed the prices of some of our aluminum sales during the period.

Bunker Oil — In order to reduce the impact of bunker oil price fluctuation on Vale’s freight hiring and consequently on Vale’s cash flow, Vale implemented a derivative program that consists of forward purchases and swaps.

Maritime Freight — In order to reduce the impact of freight price fluctuations on the Company’s cash flows, Vale implemented a derivative program that consists of purchasing Forward Freight Agreements (FFA).

Embedded derivatives — In addition to the contracts mentioned above, Vale Inco Ltd., Vale’s wholly-owned subsidiary, has nickel concentrate and raw materials purchase agreements, where there are provisions based on the movement of nickel and copper prices. These provisions are considered embedded derivatives. There is also an embedded derivative related to energy purchase in our subsidiary Albras on which there is a premium that can be charged based on the movement of aluminum prices.

Under the standard Accounting for Derivative Financial Instruments and Hedging Activities, all derivatives, whether designated in hedging relationships or not, are required to be recorded in the balance sheet at fair value and the gain or loss in fair value is included in current earnings, unless if qualified as hedge accounting. A derivative must be designated in a hedging relationship in order to qualify for hedge accounting. These requirements include a determination of what portions of hedges are deemed to be effective versus ineffective. In general, a hedging relationship is effective when a change in the fair value of the derivative is offset by an equal and opposite change in the fair value of the underlying hedged item. In accordance with these requirements, effectiveness tests are performed in order to assess effectiveness and quantify ineffectiveness for all designated hedges.

At December 31, 2009, we had outstanding cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in expected future cash flows that is attributable to a particular risk such as a forecasted purchase or sale. If a derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in earnings when the hedged item affects earnings. Ineffective portions of changes in the fair value of the derivatives designated as hedges are recognized in earnings. If a portion of a derivative contract is excluded for purposes of effectiveness testing, such as time value, the value of such excluded portion is included in earnings.

The assets and liabilities balances of derivatives measured at fair value and the effects of their recognition are shown in the following tables:


	Assets						Liabilities
	As of December 31						As of December 31
	2009				2008		2009						2008
	Short-term		Long-term		Long-term		Short-term			Long-term			Long-term
Derivatives not designated as hedge

Foreign exchange and interest rate risk
CDI & TJLP vs. floating & fixed swap		—		794		—		—			—			(561	)
USD floating rate vs. fixed USD rate swap		—		—		—		(7	)		(1	)		(14	)
EURO floating rate vs. USD floating rate swap		—		1		2		—			—			—
AUD floating rate vs. fixed USD rate swap		—		9		—		—			—			—

		—		804		2		(7	)		(1	)		(575	)

Commodities price risk
Nickel
Fixed price program		12		2		—		(3	)		(8	)		(50	)
Purchase program		—		—		—		—			—			(7	)
Strategic program		—		—		—		(32	)		—			—
Aluminium		—		—		—		(16	)		—			—
Bunker Oil Hedge		49		—		—		—			—			—
Maritime Freight Hiring Protection Program		29		—		—		—			—			—

		90		2		—		(51	)		(8	)		(57	)

Embedded derivatives:
For nickel fixed price sale		—		—		69		—			—			—
Customer raw material contracts		—		—		22		—			—			—
Natural gas hedge		—		—		—		—			—			(2	)

		—		—		91		—			—			(2	)

Derivatives designated as hedge
Foreign exchange cash flow hedge		15		59		—		—			—			—
Aluminium		—		—		—		(71	)		—			—

		15		59		—		(71	)		—			—


Total		105		865		93		(129	)		(9	)		(634	)

The following table presents the effects of derivatives for the three-month periods and years ended:


	Amount of gain or (loss) recognized in financial income (expense)																		Financial settlement																		Amount of gain or (loss) recognized in OCI
	Three-month period ended																		Three-month period ended																		Three-month period ended
	(unaudited)									Year ended of December, 31									(unaudited)									Year ended of December, 31									(unaudited)								Year ended of December, 31
	December			September			December												December			September			December												December			September		December
	31, 2009			30, 2009			31, 2008			2009			2008			2007			31, 2009			30, 2009			31, 2008			2009			2008			2007			31, 2009			30, 2009		31, 2008			2009			2008			2007

Derivatives not designated as hedge

Foreign exchange and interest rate risk
Swap BRL denominated Brazilian payrol into USD		—			—			16			—			82			—			—			—			—			—			(198	)		—			—			—		—			—			—			—
CDI & TJLP vs. USD fixed and floating rate swap		198			441			—			1,598			(34	)		934			(90	)		(30	)		(55	)		(243	)		(199	)		(293	)		—			—		—			—			—			—
EURO floating rate vs. USD floating rate swap		1			—			(656	)		—			(684	)		—			—			—			—			(1	)		1			—			—			—		—			—			—			—
USD floating rate vs. USD fixed rate swap		—			(1	)		2			(2	)		7			—			2			2			—			8			—			—			—			—		—			—			—			—
AUD floating rate vs. fixed USD rate swap		1			3			—			14			—			—			(3	)		(1	)		—			(5	)		—			—			—			—		—			—			—			—

		200			443			(638	)		1,610			(629	)		934			(91	)		(29	)		(55	)		(241	)		(396	)		(293	)		—			—		—			—			—			—

Commodities price risk
Nickel
Fixed price program		—			16			—			40			(102	)		63			(4	)		(4	)		59			22			102			(38	)		—			—		—			—			—			—
Purchase program		—			(13	)		(39	)		(35	)		21			—			23			9			(20	)		57			(54	)		—			—			—		—			—			—			—
Strategic program		(6	)		(47	)		7			(95	)		(3	)		—			37			36			—			73			—			—			—			—		—			—			—			—
Purchased scrap protection program		—			—			10			—			(23	)		—			—			—			12			—			202			—			—			—		—			—			—			—
Strategic hedging program		—			—			39			—			(6	)		(129	)		—			—			(40	)		—			(30	)		240			—			—		—			—			—			—
Platinum		—			—			(2	)		—			(5	)		(17	)		—			—			—			—			26			13			—			—		—			—			—			—
Gold		—			—			(12	)		—			(30	)		(16	)		—			—			9			—			42			33			—			—		—			—			—			—
Natural gas		—			—			(1	)		(4	)		4			(9	)		—			2			1			6			—			3			—			—		—			—			—			—
Aluminum		—			—			—			—			(68	)		46			—			—			(24	)		—			122			112			—			—		—			—			—			—
Maritime Freight Hiring Protection Program		77			(45	)		—			66			—			—			(7	)		(25	)		—			(37	)		—			—			—			—		—			—			—			—
Bunker Oil Hedge		41			9			(10	)		50			(17	)		—			(11	)		(5	)		—			(16	)		—			—			—			—		—			—			—			—

		112			(80	)		(8	)		22			(229	)		(62	)		38			13			(3	)		105			410			363			—			—		—			—			—			—

Embedded derivatives:
For nickel concentrate costumer sales		—			(9	)		(1	)		(25	)		29			—			—			4			—			(14	)		—			—			—			—		—			—			—			—
Customer raw material contracts		—			(13	)		(3	)		(76	)		10			—			—			—			(6	)		—			(10	)		—			—			—		—			—			—			—
Energy — Aluminum options		—			—			21			—			13			59			—			—			—			—			—			—			—			—		—			—			—			—

		—			(22	)		17			(101	)		52			59			—			4			(6	)		(14	)		(10	)		—			—			—		—			—			—			—

Derivatives designated as hedge
Aluminum hedge		(16	)		—			43			(16	)		(6	)		—			5			—			—			4			—			—			(42	)		6		(28	)		(36	)		(29	)		29
Bunker Oil Hedge		—			—			—			13			—			—			—			—			—			—			—			—			—			—		—			—			—			—
Foreign exchange cash flow hedge		—			—			—			—			—			—			—			—			—			—			—			—			31			6		—			38			—			—

		(16	)		—			43			(3	)		(6	)		—			5			—			—			4			—			—			(11	)		12		(28	)		2			(29	)		29


		296			341			(586	)		1,528			(812	)		931			(48	)		(12	)		(64	)		(146	)		4			70			(11	)		12		(28	)		2			(29	)		29

Unrealized gains (losses) in the period are included in our income statement under the caption of gains (losses) on derivatives, net.

Final maturity dates for the above instruments are as follows:


Interest rates / Currencies		December 2019
Bunker Oil		December 2010
Freight		December 2010
Nickel		May 2011
Aluminum		December 2010

Subsequent events

In January, we entered into an agreement, to sell the aluminum assets of our wholly-owned subsidiary Valesul Alumínio S.A, located in the State of Rio de Janeiro, Brazil, to Alumínio Nordeste S.A., a company of the Metalis group, for US$ 31.

In January we redeemed all outstanding export receivables securitization notes issued in September 2000 and July 2003. The outstanding principal amounts were US$28 for the September 2000, at an interest rate of 8.926% per annum notes due in 2010 and US$122 for the July 2003, at an interest rate of 4.43% per annum notes due in 2013. Redeemed debt amounts totaled US$150.

In January we entered into a purchase agreement with Bunge Fertilizantes S.A. and Bunge Brasil Holdings B.V. to acquire 100% of the outstanding shares of Bunge Participações e Investimentos S.A. (BPI), the Company which has assets in Brazil and investments in Fertifos Administração e Participações S.A. (Fertifos), which holds 42.3% of Fertilizantes Fosfatados S.A. – Fosfertil (Fosfertil), for US$3,800, in all cash-transaction. The acquisition is still subject to conditions precedent such as approvals from governmental regulatory agencies. Also, as part of this acquisition we entered into option contracts to buy the additional shares of Fertifos Administração e Participações S.A. (Fertifos) with Fertilizantes Heringer S.A. –Heringer (strike price US$2), Fertilizantes do Paraná Ltda. – Fertipar (strike price US$40) and Yara Brasil Fertilizantes S.A. (strike price US$785). These contracts give us the right to acquire 16.3% of Fosfertil shares and are subject to certain conditions, among which, the effective acquisition of the fertilizer assets of Bunge Group in Brazil. Control over these businesses have not been obtained when these financial statements were approved to be issued.

Supplemental Financial Information (Unaudited)

The following unaudited information provides additional details in relation to certain financial ratios.

EBITDA — Earnings Before Financial Income (Expenses), Noncontrolling Interests, Gain on Sale of Investments, Foreign Exchange and Indexation Gains (Losses), Equity in Results of Affiliates and Joint Ventures and Change in Provision for Losses on Equity Investments, Income Taxes, Depreciation and Amortization

EBITDA represents operating income plus depreciation, amortization and depletion plus impairment plus dividends received from equity investees.

EBITDA is not a U.S. GAAP measure and does not represent cash flows for the periods presented and should not be considered as an alternative to net income (loss), as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity.

Our definition of EBITDA may not be comparable with EBITDA as defined by other companies.

Although EBITDA, as defined above, does not provide a U.S. GAAP measure of operating cash flows, our management uses it to measure our operating performance and financial analysts in evaluating our business commonly use it.

Selected financial indicators for the main affiliates and joint ventures are available on our website, www.vale.com, under “investor relations”.

Indexes on Vale’s Consolidated Debt (Supplemental information — Unaudited)


	Three-month period ended									Year ended of December, 31
	December			September			December
	31, 2009			30, 2009			31, 2008			2009			2008			2007
Current debt
Current portion of long-term debt — unrelated parties		2,933			1,951			633			2,933			633			1,249
Short-term debt		30			87			—			30			—			167
Loans from related parties		19			18			77			19			77			6

		2,982			2,056			710			2,982			710			1,422
Long-term debt
Long-term debt — unrelated parties		19,898			19,110			17,535			19,898			17,535			17,608

Gross debt (current plus long-term debt)		22,880			21,166			18,245			22,880			18,245			19,030


Interest paid over:
Short-term debt		—			(1	)		—			(1	)		11			(49	)
Long-term debt		(289	)		(236	)		314			(1,113	)		1,255			(1,289	)

Interest paid		(289	)		(237	)		314			(1,114	)		1,266			(1,338	)
EBITDA		2,145			3,014			2,697			9,165			19,018			15,774
Stockholders’ equity		56,935			56,546			42,556			56,935			42,556			33,276
LTM (2) EBITDA / LTM (1) Interest paid		8			9			15			8			15			12
Gross Debt / LTM (1) EBITDA		3			2			1			3			1			1
Gross debt / Equity Capitalization (%)		29			27			13			29			13			36

Financial expenses
Interest expense		(236	)		(206	)		(334	)		(894	)		(1,194	)		(1,348	)
Labor and civil claims and tax-related actions		(33	)		(19	)		(23	)		(82	)		(99	)		(98	)
Tax on financial transactions — CPMF		—			—			—			—			—			(132	)
Others		(279	)		(205	)		(42	)		(582	)		(472	)		(939	)

		(548	)		(430	)		(399	)		(1,558	)		(1,765	)		(2,517	)

Financial income
Cash and cash equivalents		44			72			217			321			520			105
Others		21			26			30			60			82			190

		65			98			247			381			602			295


Derivatives		296			341			(586	)		1,528			(812	)		931

Financial income (expenses), net		(187	)		9			(738	)		351			(1,975	)		(1,291	)

Foreign exchange and indexation gain (losses), net
Cash and cash equivalents		(139	)		(482	)		1,427			(1,716	)		2,457			(100	)
Loans		265			1,156			(2,266	)		3,639			(3,102	)		2,923
Others		(109	)		(555	)		598			(1,248	)		1,009			(270	)

		17			119			(241	)		675			364			2,553

Financial result, net		(170	)		128			(979	)		1,026			(1,611	)		1,262


(1)		LTM — Last twelve months

Calculation of EBITDA (Supplemental information — Unaudited)


	Three-month period ended									Year ending of December, 31
	December 31,			September			December 31,
	2009			30, 2009			2008			2009			2008			2007

Operating income		1,103			2,293			1,063			6,057			14,748			13,194
Depreciation		799			721			568			2,722			2,807			2,186
Impairment		—			—			950			—			950			—

		1,902			3,014			2,581			8,779			18,505			15,380
Dividends received		243			—			116			386			513			394

EBITDA		2,145			3,014			2,697			9,165			19,018			15,774


Net operating revenues		6,333			6,706			7,255			23,311			37,426			32,242
Margin EBITDA		33.9	%		44.9	%		37.2	%		39.3	%		50.8	%		48.9	%

Adjusted EBITDA x Operating Cash Flows (Supplemental information — Unaudited)


	Three-month period ended
	December 31, 2009						September 30, 2009						December 31, 2008
				Operation						Operation						Operation
	EBITDA			cash flow			EBITDA			cash flow			EBITDA			cash flow
Net income attributable to stockholders’ Company		1,519			1,519			1,677			1,677			1,367			1,367
Income tax — deferred		(173	)		(173	)		230			230			(219	)		(219	)
Income tax — current		(583	)		—			696			—			(966	)		—
Equity in results of affiliates and joint ventures and other investments		(71	)		(71	)		(155	)		(155	)		(125	)		(125	)
Foreign exchange and monetary gains, net		(17	)		(37	)		(119	)		(184	)		241			740
Financial expenses, net		187			2			(9	)		24			738			(3	)
Noncontrolling interests		51			51			46			46			27			27
Gain on sale of investments		190			190			(73	)		(73	)		—			—
Net working capital		—			(972	)		—			385			—			2,196
Others		—			(140	)		—			(177	)		—			676

Operating income		1,103			369			2,293			1,773			1,063			4,659
Depreciation, depletion and amortization		799			799			721			721			568			568
Impairment of goodwill		—			—			—			—			950			950
Dividends received		243			243			—			—			116			116

		2,145			1,411			3,014			2,494			2,697			6,293


Operating cash flows					1,411						2,494						6,293
Income tax					(583	)					696						(966	)
Foreign exchange and monetary gains (losses)					20						65						(499	)
Financial expenses					185						(33	)					741
Net working capital					972						(385	)					(2,196	)
Others					140						177						(676	)

EBITDA					2,145						3,014						2,697


	Year ended of December, 31
	2009						2008						2007
				Operation						Operation						Operation
	EBITDA			cash flow			EBITDA			cash flow			EBITDA			cash flow
Net income attributable to stockholders’ Company		5,349			5,349			13,218			13,218			11,825			11,825
Income tax — deferred		16			16			(803	)		(803	)		(700	)		(700	)
Income tax — current		2,084			—			1,338			—			3,901			—
Equity in results of affiliates and joint ventures and other investments		(433	)		(433	)		(794	)		(794	)		(595	)		(595	)
Foreign exchange and monetary gains, net		(675	)		(1,095	)		(388	)		451			(2,559	)		(2,827	)
Financial expenses, net		(351	)		(25	)		1,999			116			1,297			102
Noncontrolling interests		107			107			258			258			802			802
Gain on sale of investments		(40	)		(40	)		(80	)		(80	)		(777	)		(777	)
Net working capital		—			1,218			—			(704	)		—			1,236
Others		—			(1,069	)		—			1,182			—			(634	)

Operating income		6,057			4,028			14,748			12,844			13,194			8,432
Depreciation, depletion and amortization		2,722			2,722			2,807			2,807			2,186			2,186
Impairment of goodwill		—			—			950			950			—			—
Dividends received		386			386			513			513			394			394

		9,165			7,136			19,018			17,114			15,774			11,012


Operating cash flows					7,136						17,114						11,012
Income tax					2,084						1,338						3,901
Foreign exchange and monetary gains (losses)					420						(839	)					268
Financial expenses					(326	)					1,883						1,195
Net working capital					(1,218	)					704						(1,236	)
Others					1,069						(1,182	)					634

EBITDA					9,165						19,018						15,774

Board of Directors, Fiscal Council, Advisory committees and Executive Officers


Board of Directors		Governance and Sustainability Committee
		Jorge Luiz Pacheco
Sérgio Ricardo Silva Rosa		Renato da Cruz Gomes
Chairman		Ricardo Simonsen

Mário da Silveira Teixeira Júnior		Fiscal Council
Vice-President

		Marcelo Amaral Moraes
Eduardo Fernando Jardim Pinto		Chairman
Francisco Augusto da Costa e Silva
Jorge Luiz Pacheco		Aníbal Moreira dos Santos
José Ricardo Sasseron		Antônio José de Figueiredo Ferreira
Ken Abe		Marcus Pereira Aucélio
Luciano Galvão Coutinho
Oscar Augusto de Camargo Filho		Alternate
Renato da Cruz Gomes		Cícero da Silva
Sandro Kohler Marcondes		Oswaldo Mário Pêgo de Amorim Azevedo

Alternate		Executive Officers

Deli Soares Pereira		Roger Agnelli
Hajime Tonoki		Chief Executive Officer
João Moisés de Oliveira
Luiz Augusto Ckless Silva		Carla Grasso
Luiz Carlos de Freitas		Executive Officer for Human Resources and Corporate
Luiz Felix Freitas		Services
Paulo Sérgio Moreira da Fonseca
Raimundo Nonato Alves Amorim		Eduardo de Salles Bartolomeo
Rita de Cássia Paz Andrade Robles		Executive Officer for Logistics, Project Management and
Wanderlei Viçoso Fagundes		Sustainability

Advisory Committees of the Board of Directors		Fabio de Oliveira Barbosa
		Chief Financial Officer and Investor Relations
Controlling Committee
Luiz Carlos de Freitas		José Carlos Martins
Paulo Ricardo Ultra Soares		Executive Officer for Ferrous Minerals
Paulo Roberto Ferreira de Medeiros
		Tito Botelho Martins
Executive Development Committee		Executive Officer for Non Ferrous
João Moisés de Oliveira
José Ricardo Sasseron
Oscar Augusto de Camargo Filho

Strategic Committee
Roger Agnelli
Luciano Galvão Coutinho
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho
Sérgio Ricardo Silva Rosa
		Marcus Vinícius Dias Severini
Finance Committee		Chief Officer of Accounting and Control Department
Fabio de Oliveira Barbosa
Luiz Maurício Leuzinger		Vera Lúcia de Almeida Pereira Elias
Ricardo Ferraz Torres		Chief Accountant
Wanderlei Viçoso Fagundes		CRC-RJ-043059/O-8

Aluminum Area — Valesul (Additional information — unaudited)


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		2			—			—			—			2			4			7			6			4			21
Quantity sold — internal market	MT (thousand)		13			9			9			9			40			16			15			19			16			66

Quantity sold — total	MT (thousand)		15			9			9			9			42			20			22			25			20			87


Average sales price — external market	US$		2,392.81			—			—			—			2,815.50			2,653.70			2,846.14			2,679.23			2,818.91			2,861.40
Average sales price — internal market	US$		2,133.06			3,629.56			3,164.66			3,596.33			2,972.28			3,786.95			4,168.23			3,321.93			2,575.30			3,695.60
Average sales price — total	US$		2,167.50			3,722.67			3,164.66			3,596.33			2,964.81			3,560.30			3,747.56			3,148.89			2,624.02			3,494.25


Stockholders’ equity	US$		271			324			354			364			364			391			453			330			272			272


Net operating revenues	US$		26			25			31			45			127			58			70			81			44			253
Cost of products	US$		(27	)		(21	)		(28	)		(40	)		(116	)		(48	)		(55	)		(75	)		(38	)		(216	)
Other expenses / revenues	US$		(3	)		(2	)		(4	)		(3	)		(12	)		(4	)		(9	)		(6	)		(5	)		(24	)
Depreciation, amortization and depletion	US$		3			3			2			1			9			4			4			4			3			15

EBITDA	US$		(1	)		5			1			3			8			10			10			4			4			28
Depreciation, amortization and depletion	US$		(3	)		(3	)		(2	)		(1	)		(9	)		(4	)		(4	)		(4	)		(3	)		(15	)

EBIT	US$		(4	)		2			(1	)		2			(1	)		6			6			—			1			13
Net financial result	US$		—			—			—			—			—			(1	)		—			7			4			10

Income before income tax and social contribution	US$		(4	)		2			(1	)		2			(1	)		5			6			7			5			23
Income tax and social contribution	US$		—			—			—			—			—			(2	)		(4	)		(3	)		(2	)		(11	)

Net income	US$		(4	)		2			(1	)		2			(1	)		3			2			4			3			12

Aluminum Area — MRN (Additional information — unaudited)


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		798			777			838			1,192			3,605			1,369			1,573			1,496			1,557			5,995
Quantity sold — internal market	MT (thousand)		2,640			2,865			3,182			3,346			12,033			2,621			2,949			3,268			3,415			12,253

Quantity sold — total	MT (thousand)		3,438			3,642			4,020			4,538			15,638			3,990			4,522			4,764			4,972			18,248


Average sales price — external market	US$		35.19			32.96			29.66			30			31.51			61.52			34.93			34.71			36.96			41.47
Average sales price — internal market	US$		30.96			27.42			26.80			28			28.15			53.89			31.24			31.96			33.35			36.87
Average sales price — total	US$		31.94			28.61			27.39			29			28.92			56.51			32.52			32.83			35.16			38.56

Long-term indebtedness, gross	US$		84			77			71			64			64			46			115			97			90			90
Short-term indebtedness, gross	US$		181			211			206			231			231			245			221			226			163			163

Total indebtedness, gross	US$		265			288			277			295			295			292			336			323			253			253


Stockholders’ equity	US$		276			374			426			330			330			493			432			315			347			347

Net operating revenues	US$		96			91			96			114			397			117			130			139			150			536
Cost of products	US$		(49	)		(59	)		(65	)		(79	)		(252	)		(63	)		(82	)		(81	)		(75	)		(301	)
Other expenses / revenues	US$		(1	)		(1	)		(1	)		(4	)		(7	)		(8	)		2			(3	)		—			(9	)
Depreciation, amortization and depletion	US$		12			1			15			26			54			14			17			10			13			54

EBITDA	US$		58			32			45			57			192			60			67			65			88			280
Depreciation, amortization and depletion	US$		(12	)		(1	)		(15	)		(26	)		(54	)		(14	)		(17	)		(10	)		(13	)		(54	)

EBIT	US$		46			31			30			31			138			46			50			55			75			226
Net financial result	US$		(1	)		23			10			(127	)		(95	)		(2	)		(11	)		(3	)		1			(15	)

Income before income tax and social contribution	US$		45			54			40			(96	)		43			44			39			52			76			211
Income tax and social contribution	US$		(15	)		(1	)		(14	)		(37	)		(67	)		(10	)		(19	)		(5	)		(21	)		(55	)

Net income	US$		30			53			26			(133	)		(24	)		34			20			47			55			156

Aluminum Area — Albras (Additional information — unaudited) — Consolidated Subsidiary


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		107			109			101			115			432			109			99			117			108			433
Quantity sold — internal market	MT (thousand)		5			6			5			7			23			7			6			7			6			26

Quantity sold — total	MT (thousand)		112			115			106			122			455			116			105			124			114			459


Average sales price — external market	US$		1,388.35			1,378.32			1,689.77			1,852.89			1,579.27			2,486.87			2,939.31			2,888.76			2,150.39			2,589.98
Average sales price — internal market	US$		1,783.09			1,251.00			1,656.00			2,067.14			1,691.39			2,307.59			2,640.89			2,625.72			2,380.23			2,827.94
Average sales price — total	US$		1,405.98			1,372.42			1,688.08			1,865.19			1,584.94			2,476.70			2,920.77			2,874.64			2,162.48			2,603.46

Long-term indebtedness, gross	US$		250			233			233			217			217			283			301			267			250			250
Short-term indebtedness, gross	US$		156			152			185			229			229			111			90			128			133			133

Total indebtedness, gross	US$		406			385			418			446			446			394			391			395			383			383


Stockholders’ equity	US$		778			952			1,080			1,094			1,094			973			1,098			948			782			782

Net operating revenues	US$		156			158			178			226			718			292			310			346			245			1,193
Cost of products	US$		(161	)		(168	)		(172	)		(216	)		(717	)		(222	)		(222	)		(254	)		(194	)		(892	)
Other expenses / revenues	US$		(13	)		(10	)		(12	)		(20	)		(55	)		(18	)		(20	)		(18	)		(24	)		(80	)
Depreciation, amortization and depletion	US$		5			6			7			7			25			8			8			9			6			31

EBITDA	US$		(13	)		(14	)		—			(3	)		(30	)		60			76			83			33			252
Depreciation, amortization and depletion	US$		(5	)		(6	)		(7	)		(7	)		(25	)		(8	)		(8	)		(9	)		(6	)		(31	)

EBIT	US$		(18	)		(20	)		(6	)		(10	)		(54	)		52			68			74			27			221
Net financial result	US$		(1	)		63			32			15			109			(66	)		37			(38	)		(6	)		(73	)

Income (loss) before income tax and social contribution	US$		(19	)		43			26			5			55			(14	)		105			36			21			148
Income tax and social contribution	US$		8			(15	)		(9	)		56			40			(9	)		(37	)		(9	)		7			(48	)

Net income (loss)	US$		(11	)		28			17			61			95			(23	)		68			27			28			100

Aluminum Area — Alunorte (Additional information — unaudited) — Consolidated Subsidiary


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		1,225			1,257			1,237			1,280			4,999			814			832			975			1,336			3,957
Quantity sold — internal market	MT (thousand)		216			273			253			218			960			235			258			301			250			1,044

Quantity sold — total	MT (thousand)		1,441			1,530			1,490			1,498			5,959			1,049			1,090			1,276			1,586			5,001


Average sales price — external market	US$		192.84			214.82			255.36			287.31			238.90			322.36			372.73			378.60			286.74			334.79
Average sales price — internal market	US$		170.69			190.76			265.62			289.10			239.79			287.59			340.49			342.74			324.54			358.65
Average sales price — total	US$		195.62			210.39			257.10			287.57			239.05			314.57			365.10			370.14			292.70			339.77

Long-term indebtedness, gross	US$		845.397			845			835			835			835			740			829			855			855			855
Short-term indebtedness, gross	US$		52.676			39			31			24			24			20			—			29			31			31

Total indebtedness, gross	US$		898			884			866			859			859			760			829			884			886			886


Stockholders’ equity	US$		1,789			2,197			2,477			2,495			2,495			2,287			2,633			2,217			1,794			1,794

Net operating revenues	US$		278			323			376			426			1,403			331			399			473			456			1,659
Cost of products	US$		(304	)		(354	)		(352	)		(356	)		(1,366	)		(274	)		(288	)		(352	)		(331	)		(1,245	)
Other expenses / revenues	US$		(7	)		(9	)		(13	)		(20	)		(49	)		(13	)		(14	)		(12	)		(20	)		(59	)
Depreciation, amortization and depletion	US$		24			32			30			33			119			19			20			16			15			70

EBITDA	US$		(9	)		(8	)		41			83			107			63			117			125			120			425
Depreciation, amortization and depletion	US$		(24	)		(32	)		(30	)		(33	)		(119	)		(19	)		(20	)		(16	)		(15	)		(70	)

EBIT	US$		(33	)		(40	)		11			50			(12	)		44			97			109			105			355
Net financial result	US$		—			144			73			—			217			(57	)		58			(117	)		(97	)		(213	)

Income (loss) before income tax and social contribution	US$		(33	)		104			84			50			205			(13	)		155			(8	)		8			142
Income tax and social contribution	US$		11			(35	)		(28	)		(58	)		(110	)		(7	)		(34	)		22			7			(12	)

Net income (loss)	US$		(22	)		69			56			(8	)		95			(20	)		121			14			15			130

Pelletizing Affiliates — Hispanobras (Additional information — unaudited)


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		—			—			—			75			75			404			400			618			—			1,422
Quantity sold — internal market	MT (thousand)		—			—			243			753			996			710			805			554			396			2,465

Quantity sold — total	MT (thousand)		—			—			243			828			1,071			1,114			1,205			1,172			396			3,887


Average sales price — external market	US$		—			—			—			70.90			62.70			71.45			203.07			227.18			—			176.15
Average sales price — internal market	US$		—			—			70.08			75.18			65.66			75.95			203.58			236.04			146.47			164.94
Average sales price — total	US$		—			—			70.08			74.79			65.46			74.32			203.41			231.37			146.47			169.04

Short-term indebtedness, gross	US$		—			—			—			—			—			75			58			7			—			—

Total indebtedness, gross	US$		—			—			—			—			—			75			58			7			—			—


Stockholders’ equity	US$		96			105			166			164			164			90			166			158			143			143


Net operating revenues	US$		—			—			17			62			79			83			248			164			52			547
Cost of products	US$		—			—			(19	)		(66	)		(85	)		(75	)		(143	)		(118	)		(36	)		(372	)
Other expenses / revenues	US$		(7	)		(10	)		(10	)		(6	)		(33	)		(2	)		(2	)		(2	)		(2	)		(8	)
Depreciation, amortization and depletion	US$		2			2			2			2			8			1			1			1			1			4

EBITDA	US$		(5	)		(8	)		(10	)		(8	)		(31	)		7			104			45			15			171
Depreciation, amortization and depletion	US$		(2	)		(2	)		(2	)		(2	)		(8	)		(1	)		(1	)		(1	)		(1	)		(4	)

EBIT	US$		(7	)		(10	)		(12	)		(10	)		(39	)		6			103			44			14			167
Net financial result	US$		1			1			1			1			4			1			(4	)		7			9			13

Income (loss) before income tax and social contribution	US$		(6	)		(9	)		(11	)		(9	)		(35	)		7			99			51			23			180
Income before income tax and social contribution	US$		—			—			9			3			12			(3	)		(34	)		(18	)		(8	)		(63	)

Net income	US$		(6	)		(9	)		(2	)		(6	)		(23	)		4			65			33			15			117

Pelletizing Affiliates — Samarco (Additional information — unaudited)


		2009															2008
		As of and for the three-month period ended															As of and for the three-month period ended
Information		March 31			June 30			September 30			December 31			Total			March 31			June 30			September 30			December 31			Total

Quantity sold — Pellets	MT (thousand)		2,141			3,313			6,011			5,440			16,905			3,010			4,327			5,519			3,413			16,269
Quantity sold — Iron ore	MT (thousand)		714			236			345			314			1,609			168			140			154			202			664

Quantity sold — total	MT (thousand)		2,855			3,549			6,356			5,754			18,514			3,178			4,467			5,673			3,615			16,933


Average sales price — Pellets	US$		98.56			71.89			70.60			79.88			75.01			105.51			142.07			152.30			156.17			141.95
Average sales price — Iron ore	US$		62.56			75.17			45.52			56.15			61.36			47.61			98.95			73.86			85.18			76.08

Long-term indebtedness, gross	US$		769,734			819,663			719,676			949,564			949,564			800			799			800			800			800
Short-term indebtedness, gross	US$		698,816			455,569			415,149			520,704			520,704			591			846			987			783			783

Total indebtedness, gross	US$		1,468,550			1,275,232			1,134,825			1,470,268			1,470,268			1,391			1,645			1,787			1,583			1,583


Stockholders’ equity	US$		822			1,073			1,375			1,224			1,224			1,078			1,213			926			732			732


Net operating revenues	US$		260			247			482			445			1,434			331			613			843			553			2,340
Cost of products	US$		(97	)		(173	)		(250	)		(248	)		(768	)		(164	)		(277	)		(314	)		(155	)		(910	)
Other expenses / revenues	US$		(59	)		(7	)		(48	)		(57	)		(171	)		(43	)		(98	)		(55	)		(67	)		(263	)
Depreciation, amortization and depletion	US	$	18			22			31			36			107			12			16			30			22			80

EBITDA	US$		122			89			215			176			602			136			254			504			353			1,247
Depreciation, amortization and depletion	US$		(18	)		(22	)		(31	)		(36	)		(107	)		(12	)		(16	)		(30	)		(22	)		(80	)

EBIT	US$		104			67			184			140			495			124			238			474			331			1,167
Gain on investments accounted for by the equity method	US$		—			—			—			—			—			3			(3	)		1			3			4
Net financial result	US$		(3	)		164			79			15			255			4			122			(281	)		(244	)		(399	)

Income (loss) before income tax and social contribution	US$		101			231			263			155			750			131			357			194			90			772
Income tax and social contribution	US$		(18	)		(54	)		(41	)		(39	)		(152	)		66			(162	)		(30	)		(17	)		(143	)

Net income (loss)	US$		83			177			222			116			598			197			195			164			73			629

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Vale S.A. (Registrant)
	By:	/s/ Roberto Castello Branco
Date: February 10, 2010		Roberto Castello Branco
		Director of Investor Relations